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

Article 292. Taxation of the organization improving the quality of loan portfolios of second-tier banks, whose sole shareholder is the Government of the Republic of Kazakhstan

1. When determining the amount of corporate income tax payable to the budget, the organization improving the quality of loan portfolios of second-tier banks, whose sole shareholder is the Government of the Republic of Kazakhstan, reduces by 100 percent the amount of corporate income tax calculated in accordance with Article 302 of this Code on income from the following activities:

1) issue of shares for the formation of the authorized capital, as well as bonds to finance the activities specified in this paragraph;

2) repurchase of own placed shares and bonds;

3) evaluation of assets’ quality, rights of claims of banks and (or) legal entities that used to be banks, with a view to deciding on their acquisition;

4) purchase from banks of doubtful and bad assets, other rights of claims and assets, their management, also by transfer into trust management, ownership and (or) their sale;

5) evaluation of the quality of shares and (or) bonds issued by banks and (or) placed by banks, legal entities that used to be banks;

6) acquisition of shares and (or) participatory interests in the authorized capital of legal entities, including those the rights of claims to which were acquired from banks, and (or) legal entities that used to be banks, also by transfer into trust management, ownership and (or) their sale;

7) purchase of shares and (or) bonds issued and placed by banks, their management, also by transfer into trust, ownership and (or) their sale;

8) property rent (lease) of property acquired and (or) obtained from banks and (or) legal entities that used to be banks, or another form of temporary use of such property on a fee basis, its transfer into trust management;

9) securitization of rights of claims and other assets purchased from banks and (or) legal entities that used to be banks;

10) acquisition of rights of claims and assets from legal entities that used to be banks, including shares and (or) participatory interests in the authorized capital of legal entities, their ownership, maintenance, security, management, also by transfer into trust management, and (or) their sale;

11) placement of money in securities and other financial instruments, as well as in banks, the National Bank of the Republic of Kazakhstan under the terms of bank account and bank deposit agreements;

12) financing of banks and (or) legal entities that used to be banks on convictions of serviceability, maturity and refundability;

13) creation, independently or jointly with banks, of an organization acquiring doubtful and bad assets by transferring its own assets to the authorized capital, managing them, including by transfer to trust management, possession and (or) their sale;

14) sale of property accepted as repayment of rights of claim acquired and (or) received from banks and (or) legal entities that were previously banks and accounted for as assets in accordance with international financial reporting standards and the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting;

15) partial or full write-off of liabilities for which the claim was terminated.

2. Income from activities not specified in paragraph 1 of this article shall be taxed in accordance with the generally established procedure. In this case, the organization improving the quality of loan portfolios of second-tier banks, whose sole shareholder is the Government of the Republic of Kazakhstan, is required to keep separate records for income exempt from taxation in accordance with this article and for income subject to taxation in accordance with the generally established procedure.

3. When receiving income subject to taxation in accordance with the generally established procedure, the deductible amount of expenses of the organization improving the quality of loan portfolios of second-tier banks, whose sole shareholder is the Government of the Republic of Kazakhstan, is determined using a proportional or separate method, at the choice of this organization.

4. Using the proportional method, the amount of expenses to be allocated to deductibles in the total amount of expenses is determined on the basis of the portion of income received from activities not specified in paragraph 1 of this article in the total amount of income.

5. Using the separate method, the organization improving the quality of loan portfolios of second-tier banks, whose sole shareholder is the Government of the Republic of Kazakhstan, maintains separate accounting for expenses related to income received from the activities specified in paragraph 1 of this article and for expenses relating to income subject to taxation in accordance with the generally established procedure.

Footnote. Article 292 as amended by the Law of the Republic of Kazakhstan dated 10.12.2020 No. 382-VI (effective from 01.01.2020).