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

Article 129. General provisions

1. Tax monitoring is conducted by analyzing financial and economic activity of taxpayers to determine their actual tax base, to oversee the compliance with the tax legislation of the Republic of Kazakhstan and current market prices to supervise transfer pricing.

2. Tax monitoring includes:

1) the monitoring of large taxpayers;

2) the horizontal monitoring.
Article 130. Monitoring of large taxpayers

1. Taxpayers that are commercial organizations, except for state enterprises, with the largest total annual income less the adjustment provided for in Article 241 of this Code, are subject to the monitoring of large taxpayers provided all of the following requirements are met, unless otherwise specified by this paragraph:

1) the sum of transaction tables of fixed assets at the end of a taxable period is not less than 325 000 times the monthly calculated index established by the law on the republican budget and effective as of the end of the year in which the list of taxpayers subject to the monitoring of large taxpayers shall be approved;

2) the number of employees is at least 250 people.

For the purposes of this article:

1) the total annual income less the adjustment provided for in Article 241 of this Code is determined on the basis of a corporate income tax declaration for a taxable period preceding the year in which the list of taxpayers subject to the monitoring of large taxpayers shall be approved;

2) the sum of transaction tables of fixed assets is determined on the basis of tax returns for a year preceding the year in which the list of taxpayers subject to the monitoring of large taxpayers shall be approved;

3) the number of employees is determined on the basis of the declaration of individual income tax and social tax for the last month of the first quarter of the year in which the list of taxpayers subject to the monitoring of large taxpayers shall be approved.

Irrespective of the observance of conditions set forth in this paragraph, large taxpayers subject to monitoring are:

1) an authorized person (operator) and (or) subsoil user (subsoil users) specified in a production sharing agreement (contract), which was concluded between the Government of the Republic of Kazakhstan or the competent authority and subsoil user before January 1, 2009 and underwent obligatory tax due diligence, having the largest total annual income less the adjustment provided by Article 241 of this Code, and (or) carrying out activities in the oil and gas condensate field or offshore field in accordance with the specified agreements (contracts);

1-1) taxpayers whose annual amount of the taxes paid up shall be not less than 2,000,000 times the monthly calculation indexes established by the Law on the republican budget and effective at the end of the year in which the list of taxpayers subject to monitoring by large taxpayers shall be subject to approval.

In this case, the annual amount of taxes paid up shall be determined for each of the three calendar years preceding the year in which the list of taxpayers subject to monitoring by large taxpayers shall be subject to approval;

2) a subsoil user who, as of October 1 of a year preceding that in which the list of taxpayers subject to the monitoring of large taxpayers was put into effect, meets the following requirements:

a contract on exploration, production, combined exploration and production of minerals, except for contracts on exploration, extraction of widespread minerals and groundwater, was concluded with a subsoil user;

a subsoil user is classified as a town-forming legal person in accordance with the list approved by the authorized agency for regional development.

2. The list of taxpayers subject to the monitoring of large taxpayers shall include:

1) the first three hundred large taxpayers, with the largest total annual income less the adjustment provided for in Article 241 of this Code, from large taxpayers meeting the requirements established by part one of paragraph 1 of this article;

2) taxpayers specified in part three of paragraph 1 of this article.

3. The list of taxpayers subject to the monitoring of large taxpayers is drawn up on the basis of data of tax returns filed as of October 1 of a year preceding the year in which the said list is put into effect and is approved by the authorized body on or before December 31 of the year preceding the year in which the said list is put into effect.

If, as of October 1 of a year preceding that in which the list of taxpayers subject to the monitoring of large taxpayers is put into effect, a taxpayer, meeting the requirements set forth in paragraph 1 of this article, is being in liquidation, such a taxpayer shall not be entered into this list.

The approved list of taxpayers subject to monitoring by large taxpayers shall be put into effect not earlier than January 1 of the year following the year of its approval, and shall be valid for two years from the date of its entry into force. This list shall not be subject to revision during the period of its validity, with the exception of cases of changing conditions under which taxpayers shall be subject to monitoring by large taxpayers in accordance with Paragraph 1 of this Article.

4. In case of reorganization of a taxpayer subject to the monitoring of large taxpayers, its successor (successors) shall be subject to the monitoring of large taxpayers before a subsequent list of taxpayers subject to the monitoring of large taxpayers is put into effect.

5. In case of liquidation of a taxpayer subject to the monitoring of large taxpayers, and also from the day of entry into legal force of a court decision declaring it bankrupt, this taxpayer is deemed to be removed from the list of taxpayers subject to the monitoring of large taxpayers.

Footnote. Article 130 as amended by the Law of the Republic of Kazakhstan dated 02.04.2019 No. 241-VI (shall be enforced from 01.01.2018).