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

Article 449. Taxation of works on the processing of customer-supplied raw materials in the Eurasian Economic Union

1. Works on the processing of customer-supplied raw materials imported into the territory of the Republic of Kazakhstan from the territory of another member state of the Eurasian Economic Union with subsequent exportation of products of processing to the territory of another state are subject to zero-rated VAT given the observance of conditions for goods’ processing and time limits for the processing of customer-supplied raw materials specified in paragraph 7 of this article and Article 450 of this Code.

2. If a taxpayer of the Republic of Kazakhstan performs works on the processing of customer-supplied raw materials imported into the territory of the Republic of Kazakhstan from the territory of a member state of the Eurasian Economic Union with subsequent exportation of products of processing to the territory of the same member state of the Eurasian Economic Union, the performance of works on the processing of customer-supplied raw materials by the taxpayer of the Republic of Kazakhstan shall be confirmed by:

1) agreements (contracts) concluded between taxpayers of the member states of the Eurasian Economic Union;

2) documents confirming the performance of works on the processing of customer-supplied raw materials;

3) documents confirming the importation of customer-supplied raw materials into the territory of the Republic of Kazakhstan (including a statement of obligation to import (export) products of processing);

4) documents confirming the exportation of products of processing from the territory of the Republic of Kazakhstan (including a statement of fulfillment of the obligation to import (export) products of processing);

5) an application for the import of goods and payment of indirect taxes (on paper in the original or copies or in electronic form), confirming the payment of value added tax from the cost of processing raw materials supplied by customer.

In case of the export of processing products of raw materials supplied by customer to the territory of a state that is not a member of the Eurasian Economic Union, the application specified in part one of this subparagraph shall not be submitted;

6) documents specified in paragraph 7 of Article 152 of this Code, confirming the receipt of foreign currency earnings to the taxpayer’s bank accounts with second-tier banks in the territory of the Republic of Kazakhstan, opened in the manner prescribed by the legislation of the Republic of Kazakhstan;

7) an opinion of a relevant authorized state body on the conditions forgoods’ processing.

3. If a taxpayer of the Republic of Kazakhstan performs works on the processing of customer-supplied raw materials imported into the territory of the Republic of Kazakhstan from the territory of one member state of the Eurasian Economic Union with subsequent sale of products of processing to the territory of another member state of the Eurasian Economic Union, the performance of works on the processing of customer-supplied raw materials by the taxpayer of the Republic of Kazakhstan is confirmed by:

1) agreements (contracts) on (for) the processing of customer-supplied raw materials, the supply of finished goods, concluded between taxpayers of the member states of the Eurasian Economic Union;

2) documents confirming the performance of works on the processing of customer-supplied raw materials;

3) certificates of acceptance and delivery of customer-supplied raw materials and finished products;

4) documents confirming the importation of customer-supplied raw materials into the territory of the Republic of Kazakhstan (including a statement of obligation to import (export) products of processing);

5) documents confirming the exportation of products of processing from the territory of the Republic of Kazakhstan (including a statement of fulfillment of the obligation to import (export) products of processing);

6) an application for the importation of goods and the payment of indirect taxes, confirming the payment of VAT on the value of works on the processing of customer-supplied raw materials received from their owner;

7) an opinion of a relevant authorized state body on the conditions of goods’ processing;

8) documents specified in paragraph 7 of Article 152 of this Code, confirming the receipt of foreign currency earnings to the taxpayer’s bank accounts with second-tier banks in the territory of the Republic of Kazakhstan, opened in the manner prescribed by the legislation of the Republic of Kazakhstan;

4. If a taxpayer of the Republic of Kazakhstan performs works on the processing of customer-supplied raw materials imported into the territory of the Republic of Kazakhstan from the territory of another member state of the Eurasian Economic Union with subsequent sale of products of processing to the territory of a state that is not a member of the Eurasian Economic Union, the performance of works on the processing of customer-supplied raw materials by the taxpayer of the Republic of Kazakhstan is confirmed by:

1) agreements (contracts) concluded between taxpayers of the member states of the Eurasian Economic Union;

2) documents confirming the performance of works on the processing of customer-supplied raw materials;

3) documents confirming the importation of customer-supplied raw materials into the territory of the Republic of Kazakhstan (including a statement of obligation to import (export) products of processing);

4) documents confirming the exportation of products of processing from the territory of the Republic of Kazakhstan (including a statement of fulfillment of the obligation to import (export) products of processing);

5) a copy of a goods declaration issued when exporting goods to the territory of a state that is not a member of the Eurasian Economic Union under the customs export procedure, certified by the customs body of a member state of the Eurasian Economic Union that carried out the customs declaration procedure;

6) a goods declaration in the form of an electronic document, about which tax authorities have a notification in their information systems from customs bodies concerning actual exportation of goods, which is also a document confirming the export of goods. If a goods declaration is in the form of an electronic document provided for in this paragraph, it is not required to submit documents specified in subparagraph 5) of paragraph 4 of this article;

7) documents specified in paragraph 7 of Article 152 of this Code, confirming the receipt of foreign currency earnings to the taxpayer’s bank accounts with second-tier banks in the territory of the Republic of Kazakhstan, opened in the manner prescribed by the legislation of the Republic of Kazakhstan;

8) an opinion of a relevant authorized state body on the conditions forgoods’ processing.

5. Works on the processing of customer-supplied raw materials imported into the territory of the Republic of Kazakhstan from the territory of another member state of the Eurasian Economic Union with subsequent sale of products of processing in the territory of the Republic of Kazakhstan shall be subject to VAT at the rate established by paragraph 1 of Article 422 of this Code.

6. In case of importation (exportation) of customer-supplied raw materials for processing by a taxpayer of the Republic of Kazakhstan, it is required to produce a statement of obligation to export (import) products of processing, and also a statement of its fulfillment in the manner and in the form approved by the authorized body in coordination with the central authorized body for state planning.

7. The processing of customer-supplied raw materials must meet the conditions forgoods’ processing set by the authorized body.

8. An opinion of a relevant authorized state body on the conditions forgoods’ processing shall contain the following information:

1) the names, classification of goods and products of processing in accordance with the single Commodity Nomenclature for Foreign Economic Activity of the Eurasian Economic Union, their quantity and value;

2) the date and number of the agreement (contract) on (for) processing, time limits for processing;

3) output standards for products of processing;

4) the nature of processing;

5) information on the person that performs the processing.

9. Upon a reasoned request of a person, with the permission of a tax authority, it is allowed to replace products of processing with goods earlier produced by the processor if their description, quantity, value, quality and technical characteristics coincide with those of the products of processing.

Footnote. Article 449 as amended by the Law of the Republic of Kazakhstan dated 10.12.2020 No. 382-VI (shall be enforced from 01.01.2021).