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

Article 721. Features of fulfillment of a tax obligation by subsoil users

1. Tax obligations on taxes and payments to the budget for activities carried out under a subsoil use contract shall be calculated in accordance with the tax legislation of the Republic of Kazakhstan effective at the time when the obligation to pay them arises, except for the cases specified in paragraph 1 of Article 722 and article 722-1 of this Code.

2. A non-resident subsoil user, operating under a subsoil use contract, is additionally subject to taxation in accordance with Articles 651 - 653 of this Code.

3. The fulfillment of tax obligations for activities under a subsoil use contract does not exempt a subsoil user from fulfilling a tax obligation for an activity outside the scope of a subsoil use contract, in accordance with the tax legislation of the Republic of Kazakhstan effective as of the date the tax obligation arises.

4. Individuals with the subsoil use right fulfill their tax obligations for an activity carried out under such right, for special payments and taxes of subsoil users and maintaining separate accounting in the accordance with the procedure established for subsoil users that are legal entities.

Footnote. Article 721 as amended by the Law of the Republic of Kazakhstan dated 21.12.2022 No. 165-VII (shall be enforced from 01.01.2023).



Article 722. Features of fulfillment of a tax obligation by certain subsoil users

1. The tax regime, specified in a production sharing agreement (contract) concluded between the Government of the Republic of Kazakhstan or a competent authority and a subsoil user before January 1, 2009 and having a mandatory tax analysis opinion, and also in a subsoil use contract approved by the President of the Republic of Kazakhstan, remains in place for those taxes and payments to the budget, for which the tax regime stability is expressly stipulated by the provisions of such an agreement (contract), is only valid for the parties to such an agreement (contract), as well as for operators, within the entire period of its validity, does not apply to persons who are not parties to such an agreement (contract) or operators, and can be modified by mutual agreement of the parties.

The obligation for taxes subject to withholding at source of payment, in respect of which a subsoil user acts as a tax agent, is fulfilled in accordance with the tax legislation of the Republic of Kazakhstan effective as of the time the obligation to pay them arises, whether or not provisions regulating the procedure for imposition of taxes withheld at source of payment are contained in a production sharing agreement (contract) concluded between the Government of the Republic of Kazakhstan or a competent authority and subsoil user before January 1, 2009 and having a mandatory tax analysis opinion, and in a subsoil use contract approved by the President of the Republic of Kazakhstan.

In case of cancellation of certain types of taxes and payments to the budget fixed by the tax regime of a production sharing agreement (contract) concluded between the Government of the Republic of Kazakhstan or a competent authority and a subsoil user before January 1, 2009 and having a mandatory tax analysis opinion, as well as by the tax regime of a subsoil use contract approved by the President of the Republic of Kazakhstan, a subsoil user continues to pay them to the budget in accordance with the procedure and in the amounts established by the production sharing agreement (contract) and (or) the subsoil use contract until their validity expires or the procedure, established by the legislation of the Republic of Kazakhstan, is altered and amended appropriately.

2. If the appointment of an operator is provided for in a production sharing agreement (contract) concluded between the Government of the Republic of Kazakhstan or a competent authority and a subsoil user before January 1, 2009 and having a mandatory tax analysis opinion, and the tax obligation under this agreement (contract) is fulfilled by the operator, such an operator fulfills the tax obligation under the said agreement (contract) in accordance with the tax regime valid for the parties to this agreement (contract) in accordance with paragraph 1 of this article.

3. The tax obligation of participants in a simple partnership (consortium) under a production sharing agreement (contract) can be fulfilled using one of the following methods:

1) the tax obligation is fulfilled by a participant in a simple partnership (consortium) on his/her own or by the operator on behalf and instructions of such a participant only with regard to the obligation attributable to the specified participant. In this case, tax forms shall indicate the details of a participant in a simple partnership (consortium) as those of a taxpayer, and the details of the operator – as those of an authorized representative;

2) the operator fulfills the tax obligation of participants in a simple partnership (consortium) in a consolidated manner for the activity carried out under the production sharing agreement (contract), if this is provided for in the production sharing agreement (contract). In this case, tax forms are drawn up and submitted (withdrawn) by the operator in the manner prescribed by Chapter 8 of this Code, specifying the details of the operator as those of a taxpayer.

4. If in the course of subsoil use operations, tax obligations arise for the operator as a taxpayer (tax agent) in accordance with the requirements of the tax legislation of the Republic of Kazakhstan, such tax obligations shall be fulfilled by the operator on his/her/its own.