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

Article 437. General provisions

1. The provisions of this Chapter are underpinned by international treaties concluded between the member states of the Eurasian Economic Union and regulate the taxation in respect of VAT in case of export and import of goods, performance of works, rendering of services, as well as its tax administration in mutual trade of the member states of the Eurasian Economic Union.

If this Chapter establishes rules for imposing VAT in case of export and import of goods, performance of works, rendering of services and its tax administration, which differ from those in other chapters of this Code, the rules of this Chapter shall apply.

Issues, not addressed in this Chapter, relating to the imposition of VAT in case of export and import of goods, performance of works, rendering of services, as well as its tax administration, are regulated by other chapters of this Code, as well as the Law of the Republic of Kazakhstan on the enactment of this Code.

The definitions used in this Chapter are provided for in international treaties ratified by the Republic of Kazakhstan, concluded between the member states of the Eurasian Economic Union.

If the definitions used in this Chapter are not provided for in international treaties ratified by the Republic of Kazakhstan and concluded between the member states of the Eurasian Economic Union, one shall apply the definitions provided for in relevant articles of this Code, the civil and other legislation of the Republic of Kazakhstan.

Tax authorities impose VAT on goods imported into the territory of the Republic of Kazakhstan from the territory of another member state of the Eurasian Economic Union at the rate established by paragraph 1 of Article 422 of this Code, which is applied to the value of taxable import.

Tax authorities carry out control over the taxpayer’s fulfillment of the tax obligation for VAT on exports and imports of goods, performance of works, rendering of services in mutual trade of the member states of the Eurasian Economic Union on the basis of tax returns filed by the taxpayer, as well as information and (or) documents on the taxpayer’s activity they receive from state bodies and other persons.

For the purposes of this Chapter, the value of goods, works, services in foreign currency is recalculated in tenge at the market exchange rate set on the last business day preceding the effective date of the turnover from the sale of goods, works, services, taxable imports.

2. For the purposes of this Chapter, a lease shall be understood to mean the conveyance of property (leased asset) under a lease agreement for a period of more than three years if it meets one of the following requirements:

1) property (leased asset) is transferred into the ownership of the lessee at a fixed price under a lease agreement;

2) a lease term exceeds 75 percent of useful life of the leased property (leased asset);

3) current (discounted) value of lease payments for the entire lease term exceeds 90 percent of the value of the leased property (leased asset).

For the purposes of this Chapter, such transfer is treated as the sale of property (leased asset) by the lessor and the purchase of property (leased asset) by the lessee. In this case, the lessee is deemed as the owner of the leased asset, and lease payments - as payments of a loan granted to the lessee, with regard to a part of the value of the goods.

For the purposes of this Chapter, a lease payment shall be understood to mean a part of the value of the goods (leased asset) inclusive of remuneration provided for in the lease agreement (contract).

For the purposes of this Chapter, leasing transactions are not recognized as a lease in case of non-observance of the above conditions or termination of a lease agreement (termination of obligations under a lease agreement) prior to expiration of three years from the date of conclusion of such agreements.

For the purposes of this Chapter, remuneration under a lease agreement shall be understood to mean all payments related to leasing the property (leased asset) out, except for the value at which such property (leased asset) is received (transferred), payments to a person who, with regard to the lessee, is not a lessor, a related party.