On taxes and other obligatory payments to the budget (Tax Code)

Article 199. Implementation of joint activities

1. Unless otherwise established by this Code, in case of an agreement on joint activities or another agreement involving two or more parties to a joint activity agreement without setting up a legal entity (hereinafter referred to as a joint activity agreement), taxable and (or) tax-related items are accounted for and taxed with respect to each party to the joint activity agreement in accordance with the procedure established by this Code.

2. Each party to a joint activity agreement independently keeps record of assets, liabilities, income and expenses for joint activity with respect to his/her participatory interest in order to identify taxable and (or) tax-related items, unless otherwise established by this Code.

3. If a joint activity agreement does not provide for a procedure for distributing assets, liabilities, income and expenses for joint activity in order to identify taxable and (or) tax-related items, the parties to the joint activity agreement shall develop and approve a tax accounting policy for joint activity prior to the filing of first tax returns that set forth such a procedure and a tax obligation arising as a result of joint activity.

4. A joint activity agreement may appoint an authorized representative of parties thereto, responsible for maintaining tax accounting for such an activity or part thereof, unless otherwise established by this Code.

5. For tax purposes, an authorized representative of parties to a joint activity agreement accounts for assets, liabilities, income and expenses for a joint activity or part thereof separately from his/her/its assets, liabilities, income and expenses for other activities.

6. The distribution of assets, liabilities, income and expenses for joint activity, in order to identify taxable and (or) tax-related items, between parties to a joint activity agreement is carried out by parties thereto and (or) their authorized representative, if any, pursuant to the results of each taxable period in the manner determined by the joint activity agreement.

If conditions of a joint activity agreement and (or) tax accounting policy for joint activity do not establish a procedure for distributing assets, liabilities, income and expenses in order to identify taxable and (or) tax-related items, parties to the joint activity agreement and (or) their authorized representative, if any, shall carry out this distribution in proportion to participatory shares under the joint activity agreement.

The outcome of distribution of assets, liabilities, income and expenses in order to identify taxable and (or) tax-related items between parties to a joint activity agreement must be documented in writing, signed by all the parties to the joint activity agreement and (or) their authorized representative, if any, and also bear aseal (if any, in the cases established by the legislation of the Republic of Kazakhstan). In the course of a tax audit, each party to the joint activity agreement submits a document,containing the results of distribution of assets, liabilities, income and expenses, to tax authorities.

The authorized representative of parties to a joint activity agreement must have copies of all documents underlying the distribution of assets, liabilities, income and expenses, unless otherwise established by this Code.