Review Of The Regulatory Resolution Of The Supreme Court Of The Republic Of Kazakhstan 'On The Judicial Practice Of Application Of The Tax Law'

On 27 February 2013 the Supreme Court introduced the Regulatory Resolution 'On the Judicial Practice of Application of the Tax Law' (hereinafter - the 'Resolution'), so that the previous regulatory resolution No. 5, dated 23 June 2006, has been repealed.

The new Resolution save the previous position of the Supreme Court in terms of many issues. Clarifications regarding the application by subsoil users of tax stability provisions and procedure for control over transfer prices were deleted, while the Resolution was added with an explanation of tax legislation in the following basic issues:

Tax Implications of Invalidation of the Supplier Registration

The Supreme Court explained that the recognition of registration of individual entrepreneur or a legal entity as invalid was not a ground for exclusion from the deductions of expenses incurred on the transaction with such entity, and for charging additional corporate income tax amounts.

Performance and Appeal of Notices Issued as a Result of In-House Audit

Notices made by the tax authority as a result of in-house audit, according to the Supreme Court, can be performed in three ways. Thus, as a performance of the notices is when a taxpayer within thirty business days either (1) submits tax returns, according to the requirements specified in the notice, or (2) provides an explanation on the notice to the tax authority, or (3) appeals actions of the tax authority that issued the Notice to a higher tax authority. The Supreme Court explained that the appeal of notice resulted from the in-house audit is an equivalent to the appeal of actions (or omissions) of the tax authority.

The taxpayer may also appeal actions of the tax authorities to the court as provided by Chapter 27 of the Civil Procedural Code of the Republic of Kazakhstan, provided that the notice had not been executed by one of the above ways. Courts may hear cases against the actions of the tax authorities only in terms of legality of the grounds...

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