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

Article 299. The definition of a loss

1. A loss from entrepreneurial activity is recognized as:

1) excess of deductions over total annual income with account of adjustments provided for in Article 241 of this Code;

2) loss from the sale of an enterprise as a property complex.

2. A loss from the sale of securities and participatory interests shall be:

1) a negative difference between the sales value and the original value – with regard to securities, except for debt securities;

2) a negative difference between the sales value and the purchase value with account of the discount and (or) premium amortization as of the date of sale – with regard to debt securities;

3) a negative difference between the sales value and original value of the participatory interests - with regard to participatory interests.

3. A loss from a derivative financial instrument is defined as excess of expenses over proceeds that are determined in accordance with Articles 278 and 279 of this Code.

Unless otherwise established by this paragraph, a loss from a derivative financial instrument is recognized as of the day of execution, early termination or other termination of rights, and also as of the day of settlement of a transaction for a derivative financial instrument, the requirements under which compensate, in whole or in part, the obligations under an earlier settled transaction for a derivative financial instrument.

A loss from a swap, and also from another derivative financial instrument, the validity of which exceeds twelve months from the date of its conclusion, the execution of which provides for payments before the expiry date of a financial instrument, the amount of which depends on the price, currency, interest rates, indices and another indicator established by such a derivative financial instrument, is recognized in each taxable period in which excess specified in part one of this paragraph occurs.

In this case, a loss from a derivative financial instrument used for purposes other than those for hedging or delivery of an underlying asset is carried forward in the manner specified in paragraph 12 of Article 300 of this Code.

A loss from a derivative financial instrument used for hedging purposes is accounted for in accordance with Article 280 of this Code.

4. A loss from the sale of land plots, construction in progress, uninstalled equipment, except for assets purchased for state needs in accordance with the laws of the Republic of Kazakhstan, is the negative difference between the sales value and the initial value of such assets.

4-1. The loss on the intellectual property object referred to in paragraph 4-3 of Article 293 and paragraph 4 of Article 709 of this Code is excess of the deductions provided for in this section over the total annual income, taking into account the adjustments specified in Article 241 of this Code. The loss shall be determined for each intellectual property object.

5. Losses specified in paragraphs 2, 3, 4 and 4-1 of this article are not the losses from entrepreneurial activity, nor are losses from the disposal of Group I fixed assets.

Footnote. Article 299 as amended by the Law of the Republic of Kazakhstan dated02.04.2019 № 241-VI (shall be enforced from 01.01.2019); dated 20.12.2021 No. 85-VII (shall be enforced from 01.01.2023).