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

Article 724. General provisions

The signature bonus is a one-time fixed fee paid by a subsoil user for obtaining the right to subsoil use in a contract area (subsoil plot), and also for expanding a contract area (subsoil plot) in the manner prescribed by the legislation of the Republic of Kazakhstan.
Article 725. The payers

A payer of the signature bonus is an individual or a legal entity that won the tender for obtaining the subsoil use right or acquired the subsoil use right pursuant to direct negotiations on granting the subsoil use right in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use, and also concluded (received), in accordance with the procedure established by the legislation of the Republic of Kazakhstan, one of the following subsoil use contracts:

1) an exploration contract;

2) a mineral extraction contract;

3) a combined exploration and extraction contract;

4) a license for geological study;

5) a license to use subsoil resources;

6) a prospecting license.

The provision of subparagraph 2) of part one of this article does not apply to subsoil users that concluded a contract on the basis of the exclusive right to receive the right to extraction in connection with commercial discovery within a contract for exploration in a relevant contract area (subsoil plot).

For the purposes of this Section, the concept “tender”, conducted in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use, is identical to the concept of “auction” conducted in accordance with this Law.
Article 726. The order for calculating the signature bonus

1. The initial amount of the signature bonus is established separately for each subsoil use contract to be concluded, in the following amounts:

1) for contracts for exploration:

in an area without approved mineral reserves, with regard to:

hydrocarbons – 2 800 times the monthly calculation index established by the law on the national budget and effective as of the date of publication of the tender terms or the date of signing the minutes of direct negotiations on granting the subsoil use right in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use;

solid minerals, except for licenses for exploration of solid minerals, prospecting and contracts for the development of man-made mineral formations - 280 times the monthly calculation index established by the law on the national budget and effective as of the date of publication of the tender terms or the date of signing the minutes of direct negotiations on granting the subsoil use right in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use;

common minerals, groundwater and therapeutic muds – 40 times the monthly calculation index established by the law on the national budget and effective as of the date of publication of the tender terms or the date of signing the minutes of direct negotiations on granting the subsoil use right in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use;

in an area with approved mineral reserves - in the manner specified in subparagraph 2) of this paragraph to determine the initial amount of the signature bonus for contracts for extraction, combined exploration and extraction of relevant minerals, which reserves are approved;

2) for contracts for extraction, combined exploration and extraction of:

hydrocarbons:

if their reserves are unapproved – 3 000 times the monthly calculation index established by the law on the national budget and effective as of the date of publication of the tender terms or the date of signing the minutes of direct negotiations on granting the subsoil use right in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use. In this case, if the subsoil use right is granted to a subsoil plot, the territory of which is divided into blocks in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use, the initial amount of the signature bonus is increased for each block, following the 300^th one, by 10 times the monthly calculation index, established by the law on the national budget and effective as of the date of publication of the tender terms or the date of signing the minutes of direct negotiations on granting the subsoil use right in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use;

if their reserves are approved – using the formula (VA х 0.04%) + (VAi х 0.01%), but not less than 10 000 times the monthly calculation index established by the law on the national budget and effective as of the date of publication of the tender terms or the date of signing the minutes of direct negotiations on granting the subsoil use right in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use, where:

VA – the value of total hydrocarbon reserves approved by the State Commission for Mineral Reserves of the Republic of Kazakhstan, by A, B, C1 industrial categories;

VAi - total value of inferred hydrocarbon reserves of C2 category approved by the State Commission for Mineral Reserves of the Republic of Kazakhstan and (or) taken into consideration in an opinion of the said Commission for current estimation of reserves of potential commercial property and forecast resources of C3 category.

In this case, if the subsoil use right is granted to a subsoil plot, the territory of which is divided into blocks in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use, the initial amount of the signature bonus is increased for each block, following the 300^th one, by 10 times the monthly calculation index established by the law on the national budget and effective as of the date of publication of the tender terms or the date of signing the minutes of direct negotiations on granting the subsoil use right in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use;

if the subsoil use right is granted to a subsoil plot, the territory of which is divided into blocks with both approved and unapproved hydrocarbon reserves, the initial amount of the signature bonus is determined in accordance with the procedure specified in this subparagraph for approved and unapproved hydrocarbon reserves, respectively. In this case, the total amount of the initial amount of the signature bonus shall not be less than 10 000 times the monthly calculation index established by the law on the national budget and effective as of the date of publication of the tender terms or the date of signing the minutes of direct negotiations on granting the subsoil use right in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use;

for contracts for mineral extraction and for combined exploration and extraction, except for contracts for the development of man-made mineral formations and licenses for solid mineral extraction, prospecting:

if their reserves are unapproved – 500 times the monthly calculation index established by the law on the national budget and effective as of the date of publication of the tender terms or the date of signing the minutes of direct negotiations on granting the subsoil use right in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use;

if their reserves are approved - using the formula (VA х 0.01%) + (VAi х 0.005%), but not less than 500 times the monthly calculation index established by the law on the national budget and effective as of the date of publication of the tender terms or the date of signing the minutes of direct negotiations on granting the subsoil use right in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use, where:

VA - the value of total reserves of mineral raw materials by A, B, C1 industrial categories, approved by the State Commission for Mineral Reserves of the Republic of Kazakhstan;

VAi - total value of inferred mineral reserves of C2 category approved by the State Commission for Mineral Reserves of the Republic of Kazakhstan and (or) taken into consideration in an opinion of this Commission for current estimation of reserves of potential commercial property and forecast resources;

for contracts for common minerals, groundwater and therapeutic muds - using the formula (VA х 0.01%), but not less than 120 times the monthly calculation index established by the law on the national budget and effective as of the date of publication of the tender terms or the date of signing the minutes of direct negotiations on granting the subsoil use right in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use;

3) for contracts for the processing of man-made mineral formations - using the formula (С1 х 0.01%), but not less than 300 times the monthly calculation index established by the law on the national budget and effective as of the date of publication of the tender terms or the date of signing the minutes of direct negotiations on granting the subsoil use right in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use;

4) for contracts for subsoil exploration for the discharge of wastewater, and also for construction and (or) operation of underground facilities not related to exploration and (or) extraction (subsoil space use) - 400 times the monthly calculation index established by the law on the national budget and the date of publication of the tender terms or the date of signing the minutes of direct negotiations on granting the subsoil use right in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use.

2. The value of mineral reserves is determined:

1) for hydrocarbons, except for crude gas specified in subparagraph 2) of this paragraph – on the basis of the arithmetic mean value of price quotations for hydrocarbons in foreign currency in accordance with Article 741 of this Code as of the day preceding the day of publication of the tender terms or the day of signing the minutes of direct negotiations on granting the subsoil use right in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use, using the market exchange rate set on the last business day preceding the date of payment of the signature bonus. In this case, to determine the value of hydrocarbon reserves approved by the state body of the Republic of Kazakhstan authorized thereto, the arithmetic mean value of price quotations, with maximum values as of the specified date, for the standard grade of oil specified in paragraph 3 of Article 741 of this Code is used;

2) for crude gas under a subsoil use contract providing for the subsoil user’s obligations for the minimum supply volume of produced crude gas to the domestic market of the Republic of Kazakhstan at a price determined by the Government of the Republic of Kazakhstan, using the following formula:

VA = V1 х P1 + V2 х P2, where:

V1 - the volume of crude gas reserves by A, B, C1 industrial categories, approved by the State Commission for Mineral Reserves of the Republic of Kazakhstan, subject to sale on the domestic market of the Republic of Kazakhstan;

V2 - the volume of crude gas reserves by A, B, C1 industrial categories, except for V1, approved by the State Commission for Mineral Reserves of the Republic of Kazakhstan;

P1 - price determined by the Government of the Republic of Kazakhstan;

P2 - arithmetic mean value of price quotations for crude gas, determined in accordance with subparagraph 1) of this paragraph;

VAi = V1 х P1 + V2 х P2, where:

V1 - the volume of crude gas reserves of C2 category, approved by the State Commission for Mineral Reserves of the Republic of Kazakhstan and (or) taken into consideration in an opinion of this Commission for current estimation of reserves of potential commercial property and forecast resources of C3 category to be sold on the domestic market of the Republic of Kazakhstan;

V2 - the volume of crude gas reserves of C2 category, approved by the State Commission for Mineral Reserves of the Republic of Kazakhstan and (or) taken into consideration in an opinion of this Commission for current estimation of reserves of potential commercial property and forecast resources of C3 category, except for V1;

P1 - price determined by the Government of the Republic of Kazakhstan;

P2 - arithmetic mean value of price quotations for crude gas, determined in accordance with subparagraph 1) of this paragraph;

3) for mineral resources specified in subparagraphs 1) and 2) of paragraph 2 of Article 745 of this Code – on the basis of the arithmetic mean value of price quotations for a mineral in foreign currency in accordance with Article 745 of this Code as of the day preceding the day of publication of the tender terms or the day of signing the minutes of direct negotiations on granting the subsoil use right in accordance with the legislation of the Republic of Kazakhstan on subsoil and subsoil use, using the market exchange rate set on the last business day preceding the date of payment of the signature bonus.

If official price quotations for relevant minerals are not published on the day preceding the day of publication of the tender terms or the day of signing the minutes of direct negotiations, the official price quotations of the most recent day, for which such price quotations were published earlier, are used.

If no exchange price is set for minerals, the initial amount of the signature bonus for contracts for extraction of relevant minerals shall be set in the minimum amounts established by subparagraphs 2) and 3) of paragraph 1 of this article.

3. The initial amount of the signature bonus before a tender for obtaining the subsoil use right may be increased by the decision of a tender commission of a competent authority.

4. The final amount of the signature bonus in the amount not lower than its initial value shall be set by the decision of a tender commission pursuant to the results of a tender for obtaining the subsoil use right or by a competent authority pursuant to the results of direct negotiations with a subsoil user and indicated in a subsoil use contract.

5. In case of expansion of a contract area (subsoil plot), the amount of the signature bonus is determined as follows:

1) if a contract area (subsoil plot) to be expanded has approved mineral reserves - depending on the type of minerals in the manner specified in paragraphs 1 and 2 of this article with respect to the volumes of such reserves;

2) if a contract area (subsoil plot) to be expanded has no approved mineral reserves:

for hydrocarbon contracts - as the product of the expansion coefficient of a contract area (subsoil plot) and the initial amount of the signature bonus for a contract. The expansion coefficient of a contract area (subsoil plot) is calculated to within four decimal places as the ratio of the size of the area, by which the contract area (subsoil plot) is expanded, to the initial size of the contract area (subsoil plot).

In this case, if the value of the expansion coefficient of a contract area (subsoil plot) exceeds 0.1, regardless of the number of cases of its expansion, the coefficient of 3 is applied to the amount of the signature bonus attributable to this excess;

for contracts for mineral raw materials, common minerals, groundwater and therapeutic muds - in the minimum amounts established by subparagraphs 2) and 3) of paragraph 1 of this article for relevant types of minerals.

6. The procedure for calculating the signature bonus, established by this article, applies to licenses for exploration or extraction of solid minerals, issued pursuant to auction results.