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

Article 229. Income from writing off obligations

1. Income from writing off obligations is:

1) the amount of an obligation with respect to which a creditor terminated the requirement to execute it by a taxpayer;

2) the amount of an obligation that is not claimed by a creditor as of the date of filing liquidation tax returns upon the liquidation of a taxpayer, unless otherwise provided for in this subparagraph.

If the liquidation of a taxpayer, in accordance with this Code, provides for a liquidation tax audit or issuance of an opinion based on the results of an in-house audit, the amount of such an obligation is determined as:

the amount of obligations (except for VAT amount) that was payable according to the taxpayer’s source documents and (to be) stated in interim liquidation balance sheet, as of the date of approval of such a balance sheet,

minus

the amount of obligations that will be fulfilled between the date of approval of interim liquidation balance sheet and the day of completion of liquidation tax audit or in-house audit.

Pursuant to the results of a liquidation tax audit, a tax authority determines the amount of an obligation on the basis of the actual amount of fulfilled obligations for the specified period. The amount of such an obligation is stated in a tax audit act.

Pursuant to the results of an in-house audit, a tax authority determines the amount of an obligation on the basis of the actual amount of fulfilled obligations for the specified period, which shall be stated in a notice of elimination of violations revealed as a result of an in-house audit;

3) the amount of an obligation for which the limitation period established by the laws of the Republic of Kazakhstan expired during a taxable period;

4) the amount of an obligation, the fulfillment of which a creditor has no right to demand on the basis of a final and binding court judgment.

2. The amount of income from writing off obligations is equal to the amount of obligations (except for VAT amount) payable according to the taxpayer’s source documents:

in the case specified in subparagraph 1) of paragraph 1 of this article – as of the day of termination of claim;

in the case specified in subparagraph 3) of paragraph 1 of this article – as of the day of expiration of the limitation period established by the laws of the Republic of Kazakhstan;

in the case specified in subparagraph 4) of paragraph 1 of this article - as of the date of entry into legal force of a court decision.

3. The provisions of paragraphs 1 and 2 of this article shall not apply to obligations recognized as doubtful in accordance with this Code.

4. Income from writing off obligations does not include a reduction in the amount of obligations due to their transfer under a contract of sale of an enterprise as a property complex.

5. Was valid until 01.01.2020 in accordance with Law of the Republic of Kazakhstan No. 121-VI dated 25.12.2017.

6. Income from writing off obligations shall not include a reduction in the amount of obligations arising from the forced restructuring of obligations of a bank that is classified as insolvent banks, carried out in accordance with Article 61-10 of the Law of the Republic of Kazakhstan “On Banks and Banking Activity in the Republic of Kazakhstan”.

7. The write-off income does not include a decrease in the amount of liabilities on debt written off by an organization specializing in improving the quality of loan portfolios of second-tier banks, whose sole shareholder is the Government of the Republic of Kazakhstan.

Footnote. Article 229 as amended by the Law of the Republic of Kazakhstan dated 02.07.2018 No. 168-VІ (shall be enforced from 01.01.2019); dated 10.12.2020 No. 382-VI (effective from 01.01.2020).