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

Article 276. Features of tax accounting for tax preference items

1. A taxpayer accounts for tax preference items, and also for subsequent expenses for reconstruction, modernization of industrial buildings and structures, machinery and equipment, separately from fixed assets during three taxable periods following the taxable period in which industrial buildings and structures, machinery and equipment, to which preferences were applied were put into operation, unless otherwise provided for by this article.

The accounting for tax preference items and subsequent expenses for reconstruction, modernization of industrial buildings and structures, machinery and equipment is maintained separately for each item to which preference was applied.

2. The initial cost of a tax preference item, which is a fixed asset, shall include the costs incurred by a taxpayer before the day of putting this item into operation. Such costs include expenses for the acquisition of an item, its production, construction, assembly and installation, as well as other costs increasing its value in accordance with international financial reporting standards and (or) the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting, except for:

costs (expenses) not subject to allocation to deductibles in accordance with subparagraphs 2), 3), 4) and 5) of Article 264 of this Code;

depreciation allowances;

costs (expenses) emerging in book records and not considered as an expense for tax purposes in accordance with paragraph 5 of Article 242 of this Code.

3. The initial value of assets with a service life of more than one year, transferred by concession grantors into the ownership of and use by a concessionaire (successor or a legal entity set up by the concessionaire exclusively for the execution of a concession agreement), shall be determined in accordance with paragraph 10 of Article 268 of this Code.

4. Assets, in respect of which preferences were abolished, are recognized as fixed assets from the day they are put into operation in case of observance of the provisions of paragraph 1 of Article 266 of this Code and are included in the value balance of a group (subgroup), which is relevant for the type of such an asset, in accordance with the procedure specified in Articles 267 and 268 of this Code.

5. If preferences for subsequent expenses for reconstruction, modernization of industrial buildings and structures, machinery and equipment are abolished, such expenses shall be accounted for in accordance with the procedure specified in paragraph 2 of Article 272 of this Code.

6. Upon expiration of three taxable periods following the taxable period in which a tax preference item is put into operation, except for the items specified in paragraph 4 of this article, this tax preference item is recognized as a fixed asset if it complies with the provisions of paragraph 1 of Article 266 of this Code and is included in the value balance of a group (subgroup), which is relevant for the type of such an asset, in accordance with the procedure specified in Articles 267 and 268 of this Code.

Footnote. Article 276 as amended by the Law of the Republic of Kazakhstan dated 10.12.2020 No. 382-VI (effective from 01.01.2018).

Clause 5. Derivative financial instruments