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

Article 405. Adjustment of amounts of VAT subject to offset on doubtful obligations, when writing off obligations

1. If a part or full amount of an obligation for purchased goods, works, services is considered doubtful in accordance with Article 230 of this Code, the amount of VAT subject to offset shall be adjusted downwards by the amount of VAT earlier recognized as the one to be offset with regard to such goods, works, services, up to the amount of the doubtful obligation, except for VAT earlier recognized as the one to be offset under subparagraphs 2) and 3) of paragraph 1 of Article 400 of this Code. The adjustment provided for in this paragraph shall be made in the taxable period of expiration of a three-year period running from the day:

following the expiry date of the obligation for purchased goods, works, services, the deadline for which is fixed;

of transfer of goods, performance of works, rendering of services under an obligation for purchased goods, works, services, the deadline for which is not fixed.

2. In case of the VAT payer’s payment for goods, works, services after downward adjustment of the amount of VAT subject to offset, the amount of VAT subject to offset shall be adjusted upwards by the amount of a tax on the said goods, works, services up to the amount of the payment in the taxable period, in which the payment was made.

3. When writing off obligations, which were not adjusted in accordance with paragraph 1 of this article, in cases, specified in paragraph 1 of Article 229 of this Code, the amount of VAT subject to offset shall be adjusted downwards up to the amount of VAT earlier recognized as the one to be offset, payable as part of such an obligation. The adjustment provided for in this paragraph shall be made in the period, in which such cases occurred.

4. In case of a failure to fully or partially satisfy an obligation for purchased goods, works, services as of the date of registering authority’s decision to withdraw a VAT payer, who is a supplier declared bankrupt, from the National Register of Business Identification Numbers, downward adjustment of the amount of VAT subject to offset shall be made up to the amount of VAT earlier recognized as the one to be offset, payable on such goods, works, services, if such an adjustment shall not be made in accordance with Paragraph 1 of this Article. The adjustment provided by this Paragraph shall be made in the taxable period, in which the decision of registering authority was issued.

5. The adjustment provided for in this article shall be made at the VAT rate, specified in an invoice, issued by a supplier of goods, works, services, when making the turnover from the sale of goods, works and services, with regard to which the adjustment was made.

Footnote. Article 405 as amended by the Law of the Republic of Kazakhstan dated 02.04.2019 No. 241-VI (shall be enforced from 01.07.2019).