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

Article 398. Transfer of property into financial lease

1. The transfer of property into financial lease shall be exempt from VAT with regard to the amount of remuneration to be received by a lessor, provided that such a transfer meets the requirements established by Article 197 of this Code.

2. The transfer of property into financial lease shall be exempt from VAT, provided all of the following requirements are met:

1) such transfer meets the requirements established by Article 197 of this Code;

2) transferrable property was purchased without VAT in accordance with subparagraph 38) of part one of Article 394 of this Code.
Article 399. VAT-exempt import

1. Exempt from VAT is import of:

1) national and foreign currency banknotes and coins (except for banknotes and coins of cultural and historical value), as well as securities;

2) raw materials for banknote production carried out by the National Bank of the Republic of Kazakhstan and its organizations;

3) goods, which is carried out by individuals in compliance with the rules for duty-free import of goods, approved in accordance with the customs legislation of the Eurasian Economic Union and (or) the customs legislation of the Republic of Kazakhstan;

4) goods, except for excisable goods, imported as humanitarian aid in the manner determined by the Government of the Republic of Kazakhstan;

5) goods, except for excisable goods, imported in the line of states, governments of states, international organizations for charity, technical assistance;

6) goods, which is carried out at the expense of grants provided by states, governments of states and international organizations;

7) goods imported for official use by foreign diplomatic missions and equivalent foreign representative offices, by consular offices of a foreign state accredited in the Republic of Kazakhstan, as well as for personal use by persons belonging to the diplomatic and administrative and technical staff of these missions, including their family members living with them, consular officials, consular employees, including their family members living with them, and exempted from VAT under international treaties of the Republic of Kazakhstan;

8) goods subject to customs declaration in accordance with the customs legislation of the Eurasian Economic Union and (or) the customs legislation of the Republic of Kazakhstan, with their placement under the customs procedure for tax exemption;

9) space facilities, equipment of ground space infrastructure facilities imported by the space activity participants, the list of which is approved by the Government of the Republic of Kazakhstan. The provisions of this subparagraph shall be applied pursuant to the confirmation by the authorized body for space activity of the importation of such space facilities and equipment for space activity purposes, the form of the confirmation is approved by the Government of the Republic of Kazakhstan;

10) medical products of any form, medical devices:

entered into the State Register of medical products and medical devices;

not entered into the State Register of medical products and medical devices, on the basis of an opinion (authorization document) issued by the authorized agency for healthcare.

The list of goods specified in this Subparagraph shall be approved by the authorized agency for healthcare in coordination with the central authorized agency for state planning and the authorized body;

10-1) materials, equipment and components for production of medical products of any form, medical devices, including prosthetic and orthopedic products, equipment for deaf and blind, special vehicles provided for disabled people.

The list of goods specified in this Subparagraph shall be approved by the authorized agency for healthcare in coordination with the central authorized agency for state planning and the authorized body;

11) medical products of any form used (applied) in the field of veterinary medicine, including pharmaceutical veterinary products, including prosthetic and orthopedic products, and veterinary equipment; materials, equipment and components for production of medical products of any form used (applied) in the field of veterinary medicine and veterinary products, including prosthetic and orthopedic products, and veterinary equipment.

The list of goods specified in this shall be approved by the authorized agency for the agro-industrial complex development by agreement with the central authorized agency for state planning and the authorized agency;

12) investment gold imported by the National Bank of the Republic of Kazakhstan, a second-tier bank or a legal entity - a professional securities market participant;

13) religious items by religious associations registered with registering authority.

The list of specified goods and criteria for its formation shall be approved by the Government of the Republic of Kazakhstan;

14) raw materials and (or) materials within the framework of an investment contract (except for a priority investment project and investment strategic project), provided all of the following requirements are met:

raw materials and (or) materials are included in the list of raw materials and (or) materials, the import of which is exempt from VAT within the framework of an investment contract approved by the authorized state body for investments in coordination with the central authorized body for state planning and the authorized body;

the import of raw materials and (or) materials is documented as required by the customs legislation of the Eurasian Economic Union and (or) the customs legislation of the Republic of Kazakhstan;

imported raw materials and (or) materials will be used by a VAT payer within the limitation period only in the activity within the framework of an investment contract.

Legal entities of the Republic of Kazakhstan are exempted from VAT on imports of raw materials and (or) materials under an investment contract for a period of five consecutive years, the running of which begins on the 1^st day of the month of putting into operation of fixed assets, specified in the work program, which is an attachment to an investment contract concluded in accordance with the legislation of the Republic of Kazakhstan in the field of entrepreneurship. If the work program provides for two or more fixed assets to be put into operation, a period of exemption from VAT on the import of raw materials and (or) materials under the investment contract shall be calculated from the 1^st day of the month, in which the first fixed asset is put into operation according to the work program.

In case of violation of the requirements established by this subparagraph within five years from the date of goods’ release for free circulation or domestic consumption in the territory of the Republic of Kazakhstan, VAT on imported raw materials and (or) materials shall be paid with accrual of a penalty for the period set for the payment of VAT on imported goods at their importation, in the manner and in the amount determined by the customs legislation of the Eurasian Economic Union and (or) the customs law legislation of the Republic of Kazakhstan;

15) raw materials and (or) materials as part of vehicles and (or) agricultural machinery, as well as their components, placed under the customs procedure of a free warehouse or free customs zone of the special economic zone "Qyzyljar" by a legal entity within the framework of a special investment contract concluded with an authorized body for the conclusion of special investment contracts, determined by the Government of the Republic of Kazakhstan, subject to the following conditions:

in relation to manufacturers of vehicle - availability of an agreement on industrial assembly of motor vehicles or an agreement on industrial assembly of vehicles with the authorized body in the field of state support for industrial activities;

in relation to manufacturers of agricultural machinery – availability of an agreement on industrial assembly of agricultural machinery with the authorized body in the field of state support for industrial activities;

in relation to manufacturers of components – availability of an agreement on industrial assembly of components for vehicles and (or) agricultural machinery with the authorized body in the field of state support for industrial activities;

16) unrefined precious metals, scrap and waste of precious metals and raw materials containing precious metals if they are:

imported by a legal entity included in the list of producers of precious metals in accordance with the Law of the Republic of Kazakhstan “On Precious Metals and Precious Stones”;

used exclusively for the production of fine gold for sale to the National Bank of the Republic of Kazakhstan;

Subparagraph 17) shall remain in force before 01.01.2029 in accordance with the Law of the Republic of Kazakhstan dated 26.12.2018 No. 203-VI.




17) goods imported by taxpayers that are participants in the Astana Hub international technological park, while meeting the following conditions:

goods are included in the list of goods whose import shall be exempted from VAT, approved by the authorized agency in the field of informatization in agreement with the central authorized agency for state planning and the authorized agency;

the import of goods shall be documented in accordance with the customs legislation of the Eurasian Economic Union and (or) the customs legislation of the Republic of Kazakhstan;

goods have been imported solely for the purpose of use in the implementation of priority types of activities in the field of information and communication technologies according to the list approved by the authorized body in the field of informatization in agreement with the central authorized body for state planning, the authorized state body carrying out state regulation in the field of technical regulation, and the authorized body;

18) goods for which the deadline for payment of indirect taxes has been changed in accordance with paragraph 10 of Article 49 of this Code and the requirements established by Article 457 of this Code have been fulfilled;

19) cane raw sugar;

20) chemicals (raw materials) for the production of pesticides, while meeting the following conditions:

the production of these goods is not available on the territory of the Republic of Kazakhstan or does not cover the needs of the Republic of Kazakhstan;

imported goods are included in the list approved by the authorized body in the field of state support for industrial activities in agreement with the authorized body, the authorized tax policy body and the authorized body for agro-industrial complex development;

imported goods are intended exclusively for the production of pesticides and are not intended for further sale.

In case of violation within three years from the date of the release of goods for domestic consumption in the territory of the Republic of Kazakhstan of the requirements established by this subparagraph, the VAT on imported goods is subject to payment with the accrual of penalties from the period established for the payment of VAT on imported goods, in the manner and amount determined by the customs legislation of the Eurasian Economic Union and (or) the customs legislation of the Republic of Kazakhstan;

Note!

Subparagraph 21) shall be valid from 01.01.2023 to 01.01.2026 in accordance with the Law of the Republic of Kazakhstan dated 21.12.2022 No. 165-VII.




21) works of art imported by non-state museums.

The list of works of art specified in this subparagraph shall be approved by the authorized culture body in agreement with the central authorized state planning body.

The procedure and conditions for applying exemption from value added tax when importing goods specified in part one of this subparagraph shall be approved by the authorized body.

In case of violation of the procedure for confirming the export of goods, the value added tax on imported goods shall be subject to payment with the accrual of penalties from the period established for the payment of value added tax on imported goods, in the manner and amount determined by the customs legislation of the Eurasian Economic Union and (or) customs the legislation of the Republic of Kazakhstan.

2. The procedure for exemption from VAT on importation of goods specified in subparagraphs 1) - 13) of paragraph 1 of this article shall be determined by the authorized body.

3. A legal entity that has concluded a special investment contract with the authorized body for the conclusion of special investment contracts, determined by the Government of the Republic of Kazakhstan shall be entitled to apply the exemption from paying value added tax when importing goods as part of finished products produced on the territory of a special economic zone or free warehouse, subject to the following conditions:

1) the goods are placed under the customs procedure for free customs zone or free warehouse;

2) the customs procedure for free customs zone or free warehouse is followed up by the customs procedure for release for domestic consumption;

3) goods are identified as part of finished products in accordance with the customs legislation of the Republic of Kazakhstan.

Footnote. Article 399 as amended by the Law of the Republic of Kazakhstan dated 26.12.2018 No. 203-VI (shall be enforced from 01.01.2019); dated 28.12.2018 No. 211-VI (shall be enforced upon expiry of ten calendar days after its first official publication); dated 02.04.2019 No. 241-VI (shall be enforced from 01.07.2019); dated 10.12.2020 No. 382-VI (see Article 2 for the procedure of entry into force); dated 24.06. 2021 No. 53-VII (shall be enforced upon expiry of ten calendar days after the date of its first official publication); dated 21.12.2022 No. 165-VII (shall be enforced from 01.01.2023).

Chapter 46. VAT OFFSET