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

Article 121. Enforced tax debt collection actions

1. Tax authorities take actions on enforced collection of tax debts of a taxpayer - a legal entity, a structural unit of a legal entity, a non-resident operating in the Republic of Kazakhstan through a permanent establishment, an individual entrepreneur, a professional with a private practice, except for cases of an appeal against a notification for audit results or notifications of horizontal monitoring results.

When collecting tax debts of a taxpayer operating under a production sharing agreement as part of a simple partnership (consortium) in cases where the fulfillment of tax obligations is imposed on an operator in accordance with subparagraph 2) of paragraph 3 of Article 722 of this Code, enforced collection actions, provided for by this chapter, apply to the taxpayer and (or) the operator.

2. Enforcement of tax debt collection actions shall be made taking into account the results of risk management system.

Prior to enforce tax debt collection actions, a taxpayer with average and major risk shall be notified of the tax debt repayment, except for cases established by Paragraph 4 of this Article.

The enforcement of tax debt collection actions to a taxpayer (tax agent) shall be carried out within the time period provided by this Chapter, depending on the risk to which the taxpayer is assigned at the date of his tax debt or at the date of transfer of the taxpayer from the low risk category to the average or major risk category.

3. The order of priority for enforced tax debt collection is as follows:

1) from bank accounts of a taxpayer;

2) from accounts of debtors of a taxpayer;

3) from the sale of restricted property;

4) in the form of compulsory issue of authorized shares.

4. In case a structural unit of a legal entity fails to pay its tax debts within forty business days after the receipt of a notice of the payment of tax debts, a tax authority takes actions on enforced collection of tax debts from the taxpayer that is a legal entity that set up this structural unit.

In case a structural unit of a legal entity fails to pay its tax debts after enforced collection actions on it in accordance with the procedure specified in part one of this paragraph and if the legal entity has more than one structural unit, a tax authority applies enforced collection actions with respect to the money in bank accounts of all structural units of such a legal entity at the same time.

In case a legal entity fails to pay tax debts within forty business days after the receipt of a notice of the payment of tax debts, a tax authority collects the amount of tax debts by taking enforced collection actions with respect to taxpayers that are structural units of this legal entity.

5. Enforced tax debt collection actions shall be stopped in case of:

1) initiation of proceedings in a bankruptcy case – on the day of a court’s ruling on the initiation of proceedings in the bankruptcy case;

2) application of a rehabilitation procedure in respect of a taxpayer - on the day of a court’s ruling on the initiation of proceedings in the rehabilitation case;

3) approval by court of an insolvency resolution agreement on – on the effective day of a court’s ruling on the approval of such an agreement;

4) involuntary liquidation of second-tier banks, insurance (reinsurance) organizations - on the effective date of a court’s decision on involuntary liquidation;

5) compulsory termination of operation of branches of non-resident banks of the Republic of Kazakhstan, branches of non-resident insurance (reinsurance) organizations of the Republic of Kazakhstan - from the date of adoption by the authorized body for regulation, control and supervision of the financial market and financial organizations of the decision to revoke the license.

In addition to the above, in the cases specified in subparagraphs 1), 2) and 3) of part one of this paragraph, a tax authority takes enforced collection actions in accordance with the provisions of this chapter with respect to the amount of a tax obligation that is not included in the register of creditors’ claims in the manner prescribed by the legislation of the Republic of Kazakhstan on rehabilitation and bankruptcy, and (or) tax obligation of a taxpayer not included in the insolvency resolution agreement approved by court.

6. In case a taxpayer (tax agent) appeals against notices of the payment of tax debts, enforced tax debt collection actions are not stopped until a decision is rendered on the results of consideration of a complaint.

7. For the purposes of this chapter, accounts of state institutions opened with the central authorized body for budget execution are equated to bank accounts, and the central authorized body for budget execution is equated to an organization carrying out certain types of banking operations.

8. Remained in force before 01.01.2019 in accordance with the Law of the Republic of Kazakhstan dated 25.12.2017 No. 121-VI.

Footnote. Article 121 as amended by the Law of the Republic of Kazakhstan dated December 10, 2020 No. 382-VI (effective from December 16, 2020).