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

Article 246. Deduction of remuneration

1. For the purposes of this article, remuneration shall be recognized as:

1) remuneration defined in subparagraph 62) of Article 1 of this Code;

2) forfeit (fine, penalty) under a credit (loan) agreement between related parties;

3) payment for the guarantee to a related party.

2. Unless otherwise established by paragraph 3 of this article, the amount of remuneration to be allocated to deductibles shall be determined by the accrual method in accordance with paragraph 2 of Article 192 of this Code.

3. Remuneration for obligations to a person entitled to create provisions (reserves) subject to deduction in accordance with paragraphs 1 and 6 of Article 250 of this Code, and (or) to a person specified in paragraph 2 of Article 233 of this Code shall be deducted in the amount of actually paid by a taxpayer or a third party against the obligations of such a taxpayer:

1) in a reporting taxable period up to the amount of expenses recognized by the taxpayer as expenses in a reporting taxable period and (or) taxable periods preceding the reporting taxable period;

2) in taxable periods preceding a reporting taxable period, up to the amount of expenses recognized by the taxpayer as expenses in the reporting taxable period.

4. Remuneration is deducted with account of the provisions specified in paragraphs 2 and 3 of this article, within the amount calculated on the following formula:

(A + E) + (AE/AL) х (MC) х (B + C + D),

where:

A – is the amount of remuneration, except for the amounts included in B,C,D,E indices;

B – is the amount of remuneration (to be) paid with account of the provisions of paragraph 3 of this article to the related party, except for the amounts included in E index;

C – is the amount of remuneration (to be) paid with account of the provisions of paragraph 3 of this article, to persons registered in a state with preferential taxation, determined in accordance with Article 294 of this Code, except for the amounts included in B index;

D - the sum of D1 and D2 indices with account of the provisions of paragraph 3 of this article, except for the amounts included in C index;

D1 - the amount of remuneration paid (to be paid) to an independent party for loans secured by the deposit of the related party;

D2 - the amount of remuneration paid (to be paid) to an independent party for loans secured by guarantee, pledge or other form of collateral of related parties, if obligations under the guarantee, pledge or other form of collateral (payment of a loan) are fulfilled by a related party in a reporting taxable period;

D - the amount of remuneration:

for credits (loans) issued by a credit partnership established in the Republic of Kazakhstan, a bank that is a national development institution, whose controlling stake is held by the national management holding;

in the form of a discount or coupon (taking into account the discount or premium from the cost of the initial placement and (or) acquisition cost) on debt securities held by the unified accumulative pension fund;

E - the amount of remuneration for credits (loans) granted by a credit partnership established in the Republic of Kazakhstan, a bank that is a national development institute, a controlling interest in which is held by the national management holding;

MC- marginal coefficient;

AE - average annual total equity;

AL - average annual amount of liabilities.

When calculating A, B, C, D, E amounts, the remunerations included in the cost of the construction object in accordance with international financial reporting standards and (or) the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting shall be excluded. For the purposes of this article, an independent party is a party that is not related.

For the purposes of this paragraph, the parent company is a national company, the sole participant of which is the national management holding, provided that the said national company owns one hundred percent of the shares (participatory interests) in each subsidiary.

5. For the purposes of paragraph 4 of this article:

1) the average annual total equity is equal to the arithmetic-mean of sums of equity at the end of each month of a reporting taxable period. The negative value of the average annual total equity for the purposes of this article is considered to be zero;

2) the average annual amount of liabilities is equal to the arithmetic-mean of sums of liabilities in each month of a reporting taxable period. When calculating the average annual amount of liabilities, one shall not take into account assessed obligations such as those:

for taxes and payments to the budget;

for wages and other income of employees;

for deferred income, except for income from a related party;

for remunerations and commissions;

for dividends;

estimated liabilities accrued in accounting in accordance with international financial reporting standards and (or) requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting;

3) the marginal coefficient for financial organizations (except for organizations engaged in microfinance activities) is 7, for other legal entities, including organizations engaged in microfinance activities -4

6. For the purposes of paragraph 4 of this article, the amount of equity of a permanent establishment of a non-resident legal entity in the Republic of Kazakhstan is determined as a difference between the assets and liabilities of such a permanent establishment.

For the purposes of this paragraph, the amount of equity of a permanent establishment of a non-resident legal entity in the Republic of Kazakhstan is treated as if this permanent establishment was a detached and separate legal entity and acted independently of the non-resident legal entity whose permanent establishment it is.

Footnote. Article 246 as amended by the Law of the Republic of Kazakhstan dated 10.12.2020 No. 382-VI (enforcement, Article 2); dated 24.06. 2021 No. 53-VII (effective from 01.01.2022); dated 21.12.2022 No. 165-VII (shall be enforced from 01.01.2023).