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

Article 42. General provisions on the accounting of income, expenses and assets arising as a result of trust management of assets for corporate and individual income taxes

1. For the purposes of this Code, income, expenses and assets from trust management of assets shall be understood to mean those arising in the course of performance of duties of trust management of assets by a trust manager in his/her/its own name and in the interests of the founder of trust management, respectively:

income (to be) received;

expenses to be paid (incurred), the compensation of which is provided for by a trust management agreement, an act on the establishment of trust management of assets or in other cases of the emergence of trust management of assets, including remuneration;

assets acquired and (or) received by a trust manager through the performance of duties of trust management of assets in his/her/its own name and in the interests of the founder of trust management.

2. For the purposes of fulfilling a tax obligation for corporate and individual income taxes for activity under a trust management agreement, a trust manager is required to keep separate accounting in accordance with Articles 194 and 195 of this Code.

3. The transfer of assets to a trust manager by the founder of trust management shall not mean the sale of such assets by this founder and is not recognized as the income of the trust manager.

4. The trust manager’s return of assets to the founder of trust management upon termination of a trust management agreement, an act on the establishment of trust management of assets or in other cases of the emergence of trust management of assets is not the sale of this property by a given manager and is not considered to be the income (loss) of the founder of trust management.

5. The positive difference between income and expenses from trust management over a taxable period, which is determined on the basis of the trust manager’s report on his/her/its activity provided for by the civil legislation of the Republic of Kazakhstan, is net income of the founder of trust management from trust management.

6. In cases where, in accordance with paragraph 1 of Article 40 of this Code, the fulfillment of tax obligations for corporate and individual income taxes on trust management activity is performed by a trust manager, the founder of trust management is not entitled to recognize as deduction the amount of remuneration provided for by the trust management agreement or in other cases of the emergence of trust management of assets and paid to the trust manager.