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

Article 451. Turnovers and import exempted from VAT in the Eurasian Economic Union

1. Subject to exemption from VAT are turnovers from the sale of:

1) works, services, specified in Chapter 45 of this Code, if the place of their sale is the Republic of Kazakhstan;

2) services for the repair of goods imported into the territory of the Republic of Kazakhstan from the territory of the member states of the Eurasian Economic Union, including their reconditioning, replacement of components.

Documents that confirm the rendering of services, specified in this subparagraph, are those provided for in paragraph 3 of Article 441 of this Code.

The list of services, specified in this subparagraph, shall be approved by the authorized body;

3) international communications services rendered by a taxpayer of the Republic of Kazakhstan to a taxpayer of another member state of the Eurasian Economic Union.

2. Subject to exemption from VAT is the import of such goods as those:

1) specified in subparagraphs 1), 2), 4) - 13) and 15) of paragraph 1 of Article 399 of this Code.

The VAT exemption order for the import of goods, specified in this subparagraph, within the Eurasian Economic Union shall be determined by the authorized body;

2) imported for the warranty service provided for by an agreement (contract).

The import of goods for warranty service shall be confirmed by an agreement (contract) providing for the warranty service under which the goods were purchased, shipping documents, a claim and a defects certificate confirmed by the parties to the agreement (contract);

3) raw materials and (or) materials under an investment contract, 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 under the investment contract approved by the authorized state body for investment in coordination with the central authorized body for state planning and the central authorized body for budget planning;

a VAT payer will only use imported raw materials and (or) materials within the limitation period for carrying out the activity under the investment contract.

Legal entities of the Republic of Kazakhstan are exempted from VAT on the import of raw materials and (or) materials under an investment contract for a period of five consecutive years, the running of which begins on 1^st day of the month of putting into operation of fixed assets, included in the work program that is an annex to the investment contract concluded in accordance with the legislation of the Republic of Kazakhstan on entrepreneurship. If the work program provides for the putting of two or more fixed assets into operation, the 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 ofputting into operation of the first fixed asset as required by the work program.

In case of violation of the requirements, specified in this subparagraph, within five years of the date of the taxpayer’s recognition of imported goods in accounting records, VAT on imported raw materials and (or) materials shall be paid with the accrual of a penalty for the period established for the payment of VAT on imported goods at their importation, in the manner and in the amount determined by the tax legislation of the Republic of Kazakhstan;

4) raw materials and (or) materials in the composition 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 vehicle manufacturers – availability of an agreement on the industrial assembly of motor vehicles or an agreement on the 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 the industrial assembly of agricultural machinery with the authorized body in the field of state support for industrial activities;

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

3. If goods earlier imported into the territory of the Republic of Kazakhstan are used for purposes other than those in connection with which their import wasexempted from VAT in accordance with the legislation of the Republic of Kazakhstan, VAT on the import of such goods is subject to payment as of the last date of the time period established by this Code for the payment of VAT when importing goods.

4. The remuneration paid by a lessee that is a taxpayer of the Republic of Kazakhstan to a lessor of another member state of the Eurasian Economic Union under a lease agreement is VAT-exempt.

5. 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 have the right 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 under compliance with 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 a finished product in accordance with the customs legislation of the Republic of Kazakhstan.

Footnote. Article 451 as amended by the Law of the Republic of Kazakhstan dated 10.12.2020 No. 382-VI (shall be enforced from 01.01.2020); dated 24.06. 2021 No. 53-VII (shall be enforced upon expiry of ten calendar days after the date of its first official publication);