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

Article 450. Time limit for the processing of customer-supplied raw materials

1. Time limit for the processing of customer-supplied raw materials exported from the territory of the Republic of Kazakhstan to the territory of a member state of the Eurasian Economic Union, and also of that imported into the territory of the Republic of Kazakhstan from the territory of the member states of the Eurasian Economic Union, is determined in accordance with the terms of an agreement (contract) on (for) the processing of customer-supplied raw materials and may not exceed two years from the date of customer-supplied raw materials’ recognition in accounting records and (or) their shipment.

2. In case of a failure to observe the time limit specified in paragraph 1 of this article, customer-supplied raw materials imported into the territory of the Republic of Kazakhstan for processing, for tax purposes, shall be recognized as taxable import and subject to VAT from the date of importation of the goods into the territory of the Republic of Kazakhstan in accordance with this Chapter.

3. In case of a failure to observe the time limit specified in paragraph 1 of this article, customer-supplied raw materials exported from the territory of the Republic of Kazakhstan to the territory of a member state of the Eurasian Economic Union for processing, for tax purposes, shall be recognized as taxable sales turnover and subject to VAT from the date of exportation of customer-supplied raw materials from the territory of the Republic of Kazakhstan at the rate established by paragraph 1 of Article 422 of this Code, except for cases specified in paragraph 3 of Article 393 of the Code and paragraphs 2 and 3 of Article 447 of this Code.

For the purposes of this paragraph, the amount of taxable turnover on raw materials supplied by customer attributable to the volume of products of processing of raw materials supplied by customer not imported back into the territory of the Republic of Kazakhstan within the established time limits shall be determined in the amount of the cost of raw materials supplied by customer included in the cost of such processed products, based on the accounting policy developed in accordance with international financial reporting standards and (or) the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting.

For the purposes of applying this article, the method of determining the production cost, fixed in the taxpayer’s accounting policy, shall remain unchanged within a calendar year.

Footnote. Article 450 as amended by the Law of the Republic of Kazakhstan dated 10.12.2020 No. 382-VI (shall be enforced from 01.01.2018).