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

Article 429. Excess of the amount of VAT subject to offset over the amount of a tax assessed for a taxable period

1. Unless otherwise provided for by this Chapter, the amount of VAT subject to offset in excess over the amount of the tax assessed on an accrual basis according to the declaration at the end of the reporting taxable period (hereinafter referred to as excess VAT) is applied against future VAT payments.

Excess VAT is not applied against the payment of VAT on imported goods and (or) when purchasing works, services from a non-resident.

2. Excess VAT at the end of the taxable period of zero-rated sales turnovers shall be returned with regard to purchased goods, works and services used for the purposes of taxable sales turnovers in the manner prescribed by Article 431 of this Code, provided that all of the following requirements are met:

1) a VAT payer continuously sells zero-rated goods, works, services;

2) zero-rated sales turnover for the taxable period of continuous sale of goods, works, services makes up at least 70 percent of total taxable sales turnover.

For the purposes of this paragraph, continuous sale of zero-rated goods, works and services includes zero-rated sale of goods, performance of works, rendering of services for three consecutive taxable periods, at least once in each quarter. In addition, continuous sale shall mean such sale in each of the specified taxable periods.

3. In case of a failure to observe the conditions specified in paragraph 2 of this article, the excess VAT amount shall be refunded with regard to the amount of the tax that was offset on the goods (works, services) used for the purposes of zero-rated sales turnover.

With regard to international carriage, the excess VAT amount subject to refund is calculated by applying the unit weight of physical volume of international carriage in the total volume of carriage to the amount of VAT offset in the taxable period, for which the refund of excess VAT amount is claimed in a VAT declaration.

4. Excess VAT arising from the purchase of goods, works and services not used for the purposes of zero-rated sales turnovers shall be refunded up to the amounts of VAT that was offset, paid at the purchase of works, services from a non-resident in accordance with Article 373 of this Code.

5. Excess of VAT specified in Paragraph 1 of this Article, which has developed with the payer of VAT, having the right to a simplified procedure for the return of VAT, shall be refunded.

Exceeding the value added tax established by this paragraph is returned at the choice of the taxpayer of the procedure and terms established by Articles 431 and (or) 434 of this Code.

In the case of choosing Article 434 of this Code for the remaining part of the excess of value added tax, the taxpayer has the right to apply Article 431 of this Code.

6. The provisions of Paragraphs 2, 3 and 4 of this Article shall not be applied:

to the amount of value added tax, which is returned in accordance with Article 432 of this Code;

to the taxpayers specified in subparagraph 1) of paragraph 2 of Article 434 of this Code, having the right to apply the simplified procedure for the return of excess of value added tax.

7. When determining the excess VAT amount subject to refund from the state budget, one shall not account for the amount of VAT that was offset:

on invoices issued by a procurement organization in the field of the agro-industrial complex;

on goods, works, services for minerals transferred to fulfill the tax obligation in kind (including goods, works, services associated with the sale of such minerals).

8. For the taxpayers deregistered for value added tax, the excess of value added tax that has developed shall be subject to write-off:

as of the date of the tax authority’s decision, in case of non-fulfillment of the conditions provided for by paragraph 4 of Article 424 of this Code;

after fulfilling the requirements specified in subparagraph 3) of paragraph 1 of Article 369 of this Code.

The excess of value added tax shall be written off from the personal accounts of taxpayers in the manner determined by the authorized body.

9. Is excluded by the Law of the Republic of Kazakhstan dated 10.12.2020 No. 382-VI (shall be enforced from 01.01.2021).

10. Rules for the refund of excess VAT shall be approved by the authorized body.

Footnote. Article 429 as amended by the Law of the Republic of Kazakhstan dated 24.05.2018 No. 156-VI (shall be enforced from 01.01.2018); dated 02.04.2019 No. 241-VI (shall be enforced from 01.01.2019); dated 10.12.2020 No. 382-VI (shall be enforced from 01.01.2021); dated 20.12.2021 No. 85-VII (shall be enforced from 01.01.2022).