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

Article 432. Features of refunding excess VAT to certain categories of taxpayers

1. In case of excess VAT with regard to goods, works, services purchased by a taxpayer in connection with the construction of buildings and structures for industrial purposes put into operation in the territory of the Republic of Kazakhstan for the first time, the excess VAT amount for the period of construction is refunded to such a taxpayer in accordance with the procedure and within the time limits established by paragraph 3 of this article.

For the purposes of this article, buildings for industrial purposes are:

1) industrial buildings and warehouses;

2) transport, communications buildings;

3) non-residential agricultural buildings.

For the purposes of this article, structures for industrial purposes are structures other than those for sports and recreation, administrative purposes, parking facilities or car parks, as well as for cultural, entertainment, hotel, restaurant purposes.

Industrial buildings and structures shall be classified as the buildings and structures specified in parts two and three of this paragraph in accordance with the classification approved by the authorized state body for state technical regulation.

The provisions of part one of this paragraph are also applied to the “turnkey” construction in accordance with the legislation of the Republic of Kazakhstan.

In this case, a period of construction is understood to mean a period of time between the beginning of construction and the date of putting buildings and structures into operation.

For the purposes of this article, the earliest of the dates below shall be considered the beginning of construction:

1) the date of conclusion of an agreement (contract) on (for) the construction;

2) the date of conclusion of an agreement (contract) on (for) the execution of design works.

The provisions of this paragraph apply, provided all of the following requirements are met:

1) a taxpayer is an entity operating in the territory of a special economic zone or a start-up implementing a priority investment project;

2) construction is carried out under a long-term contract specified in paragraph 1 of Article 282 of this Code;

3) buildings and structures are recognized as fixed assets;

4) buildings and structures were commissioned.

A claim for the refund of excess VAT amount provided for in this paragraph shall be indicated in the next scheduled VAT declaration for taxable periods following the taxable period, in which the buildings and structures were put into operation, with account of the provisions of Article 48 of this Code.

2. In case of excess VAT with regard to goods, works, services purchased by the taxpayer in a period of geological exploration and site development, such excess VAT amount shall be refunded in accordance with the procedure and within the time limits specified in paragraph 3 of this article.

In this case, the period of geological exploration and site development is a period of time between the date of concluding a relevant subsoil use contract in the manner prescribed by the legislation of the Republic of Kazakhstan and the date of commencement of export of minerals mined under a relevant subsoil use contract, except for common minerals, groundwater and therapeutic muds.

The provision of this paragraph applies to taxpayers operating under a subsoil use contract (except for contracts of exploration and (or) extraction of common minerals, groundwater and therapeutic muds), concluded in accordance with the procedure established by the legislation of the Republic of Kazakhstan.

A claim for the refund of excess VAT amount specified in part one of this paragraph shall be indicated by a taxpayer in the next scheduled VAT declaration for taxable periods following the taxable period including the date of commencement of export of minerals mined under a relevant subsoil use contract, except for common minerals, groundwater and therapeutic muds, with account of the provisions of Article 48 of this Code.

3. Excess VAT specified in paragraphs 1 and 2 of this Article shall be refunded within twenty taxable periods in equal installments, starting from the taxable period, in which the reliability of accumulated excess VAT amount claimed for refund was confirmed.

4. The provisions of this article do not apply to the excess amount of value added tax, which is returned in accordance with Article 429 of this Code, as well as when returning the excess of value added tax to taxpayers who have the right to apply the simplified procedure for refund of the excess added value tax, provided for in Article 434 of this Code.

Footnote. Article 432 as amended by the Law of the Republic of Kazakhstan dated 20.12.2021 No. 85-VII (shall be enforced from 01.01.2022).