Alert On The Decision Of The Appeal Commission Of The Ministry Of Finance On Tax Dispute

• Published date: 01 March 2024
• Subject Matter: Tax, Transfer Pricing, Tax Authorities
• Law Firm: GRATA International
• Author: Ms Assel Ilyassova

On 24 November, 2023 the Appeal commission of the Ministry of finance of the Republic of Kazakhstan (the 'Appeal Commission') issued a decision on the tax dispute concerning transfer pricing control of a loan agreement.

The dispute background:

• Regional tax authorities subjected a Kazakh company to a thematic tax audit on transfer pricing issues. As a result, the Kazakh company was charged with withholding tax and penalty.
• The ground for such charging was that the interest rates of the loan granted by a German company to the Kazakh company exceeded the interest rates of the loans granted by the Kazakh banks. i.e. the market rates.
• The regional tax authorities used the National Bank of the Republic of Kazakhstan as the source for the market rates determination as the officially recognised sources (like...