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

Article 403. Exclusion of VAT subject to offset from an amount

VAT, earlier recognized as VAT subject to offset, shall be excluded in case of:

1) on a transaction (operation), in which the action (actions) on issuing an invoice and (or) another document is recognized (are recognized) by the court or by a decision of the criminal prosecution body on termination of a pre-trial investigation on non-rehabilitating grounds, committed by a private business entity without actual performance of works, rendering services, shipment of goods;

2) a transaction declared invalid by a final and binding court judgment;

3) an amount erroneously stated in a document underlying VAT offset;

4) transactions without actual performance of works, rendering of services, shipment of goods with a taxpayer deregistered for VAT by a decision of a tax authority in accordance with subparagraphs 2) and 3) of paragraph 6 of Article 85 of this Code, the head and (or) the founder (participant) of (in) which is not involved in the registration (re-registration) and (or) financial and economic activity of such a legal entity, established by a final and binding court judgment, except for transactions with respect to which a court established the actual receipt of goods, works, services from such a taxpayer.

VAT subject to offset shall be excluded from an amount, as provided for by this article, in the taxable period, in the declaration for which VAT is recognized as VAT subject to offset.

Footnote. Article 403 as amended by the Law of the Republic of Kazakhstan dated 10.12.2020 No. 382-VI (shall be enforced from 01.01.2021).



Article 404. Adjustment of the amount of VAT subject to offset

1. Adjustment of the amount of VAT subject to offset is an increase or decrease in the amount of VAT subject to offset in the cases specified in this article and Article 405 of this Code.

2. The amount of VAT subject to offset shall be reduced with respect to goods, work, services, for which VAT has previously been offset, in the following cases of:

1) goods, works, services not used for the purposes of taxable turnover, except for those used for the purposes of non-taxable turnover, with regard to which a taxpayer applied the proportional method in accordance with Articles 407 and 408 of this Code;

2) for goods in case of their damage, loss (except for cases arising as a result of emergency situations and (or) during the state of emergency). In this case, damage to goods means deterioration of all or individual qualities (properties) of the goods, as a result of which such a commodity cannot be used for the purposes of taxable turnover. Loss of goods shall mean an event that resulted in the destruction or loss of goods. The loss of goods incurred by the taxpayer within the natural loss limits established by the legislation of the Republic of Kazakhstan shall not be deemed a loss;

In case of damage, loss of goods in cases arising as a result of emergency situations, the amount of VAT subject to offset shall not be reduced if there is a confirmation from the authorized civil protection body of the fact of an emergency situation on goods for which there must be:

a document confirming the facts of damage, loss of goods, drawn up in accordance with the legislation of the Republic of Kazakhstan on accounting and financial reporting;

information reflected in the tax register compiled in accordance with paragraph 7-1 of Article 215 of this Code.

In the event of damage, loss of goods in cases that arose during the state of emergency, the amount of VAT subject to the offset shall not be reduced if there is a copy of the decision of the body conducting a criminal prosecution on recognizing the taxpayer as a victim in criminal cases related to the state of emergency, on goods (with the exception of goods for which money was received to compensate for property damage caused during the state of emergency, by the decision of the commission created by the local executive body, when the taxpayer is included in the register formed by the specified local executive body), for which there must be:

a document confirming the facts of damage, loss of goods, drawn up in accordance with the legislation of the Republic of Kazakhstan on accounting and financial reporting;

information reflected in the tax register compiled in accordance with paragraph 7-1 of Article 215 of this Code;

3) on excess losses incurred by the natural monopoly subject;

4) on property transferred as a contribution to the authorized capital;

5) on volumes of minerals transferred by the subsoil user to fulfill the tax obligation in kind;

6) upon occurrence of the cases provided for in paragraph 2 of Article 383 of this Code.

3. The amount of VAT subject to offset is increased upon the occurrence of cases provided for by paragraph 2 of Article 383 of this Code.

The amount of VAT subject to offset in the event of the cases provided for by paragraph 2 of Article 383 of this Code shall be increased or reduced up to the amount of VAT specified in a supplementary invoice issued by a supplier of goods, works, services in connection with the upward or downward adjustment of the amount of taxable turnover.

4. Adjustment of the amount of VAT credited in the cases established by subparagraphs 1), 2), 3), 4) and 5) of paragraph 2 and paragraph 3 of this article shall be made in the tax period in which such cases happen.

The adjustment of the VAT amount that is offset, in the case established by subparagraph 6) of paragraph 2 of this article, shall be made in the taxable period determined by paragraph 5 of Article 401 of this Code.

5. In the cases, specified in subparagraphs 1) - 5) of paragraph 2 of this article, the amount of VAT subject to offset on purchased, constructed, created goods shall be adjusted up to the amount of VAT, which is determined by applying the VAT rate, effective as of the date of the adjustment, to the book value of the goods, indicated in accounting records as of that date, exclusive of revaluation and impairment.

6. If turnover from the sale of transfer of the right to own and (or) use, and (or) dispose of a part of a divisible land plot, with regard to which VAT was offset prior to such turnover from the sale, is exempt from VAT in accordance with Article 396 of this Code, for which separate accounting is maintained in accordance with Article 409 of this Code, the amount of VAT subject to offset is adjusted by the amount of VAT on such a land plot, which is determined using the following formula:

VATadj = VATtbo х Slp /Stot, where:

VATadj - the amount of VAT adjustment;

VATtbo - the amount of VAT earlier recognized as the one to be offset;

Stot - total area of a land plot before its division;

Slp - the area of a land plot, the turnover from the transfer of the right to own and (or) use and (or) dispose of which is exempt from VAT in accordance with Article 396 of this Code, for which separate accounting is maintained in accordance with Article 409 of this Code.

7. The adjustment provided for in this article is not made in the cases, specified in paragraph 5 of Article 372 of this Code, except for those specified in subparagraphs 1) and 6) of paragraph 5 of Article 372 of this Code.

8. The amount of VAT subject to offset inclusive of the adjustment, provided for in this article, may have a negative value.

Footnote. Article 404 as amended by the Law of the Republic of Kazakhstan dated 02.04.2019 No. 241-VI (shall be enforced from 01.01.2018); dated 11.07.2022 No. 135-VII (shall be enforced from 01.01.2022); dated 21.12.2022 No. 165-VII (enforcement, see art. 4).