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

Article 746. Rates of the mineral extraction tax

1. Unless otherwise provided by this article, the rates of tax on the extraction of minerals, mineral raw materials, including those that have undergone only primary processing, shall be established in the following amounts:

Item №		Minerals, mineral raw materials, including those after primary processing	Rates, in percent
1	2	3	4
1.	Ores of ferrous, non-ferrous and radioactive metals	Chrome ore (concentrate)	21,06 %
		Manganese, iron-manganese ore (concentrate)	3,25 %
		Iron ore (concentrate)	3,64 %
		Uranium (extracted from productive solutions, mine method)	6 %
2.	Metals	Copper	8,55 %
		Zinc	10,5 %
		Lead	10,4 %
		Gold, silver	7,5 %
		Platinum, palladium	6,5 %
		Aluminum	0,38 %
		Tin	3,9 %
		Nickel	7,8 %
3.	Mineral raw materials containing metals	Vanadium	5,2 %
		Chromium, titanium, magnesium, cobalt, tungsten, bismuth, antimony, mercury, arsenic and others	7,8 %
4.	Mineral raw materials containing rare metals	Niobium, lanthanum, cerium, zirconium	7,7 %
		Gallium	1,0 %
5.	Mineral raw materials containing trace metals	Selenium, tellurium, molybdenum	7,0 %
		Scandium, germanium, rubidium, cesium, cadmium, indium, thallium, hafnium, rhenium, osmium	6,0 %
6.	Mineral raw materials containing radioactive metals	Radium, thorium	5,0 %
7.	Mineral raw materials containing rare metals	Lithium, beryllium, tantalum, strontium	7,7%
8.	Mineral raw materials containing rare-earth metals	Praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lute, yttrium	6,0%
Mineral raw materials containing non-metallic solid minerals
9.	Fuel, chemical and agronomic minerals	Coking coal, anthracite	4,05 %
		Coal (except for coking and anthracite), brown coal, oil shale	2,7 %
		Phosphorites	4,0 %
		Borates, including boric anhydrite	3,5 %
		Potassium and potassium-magnesium salts	6,0 %
		Barite	4,5 %
		Talc	2,0 %
		Gypsum	5,6 %
		Sulfur.	6,0 %
		Fluorites	3,0 %
		Wollastonite	3,5 %
		Schungite	2,0 %
		Graphite etc.	3,5 %
Raw gemstones
10.	Mineral raw materials containing precious stones	Diamond, ruby, sapphire, emerald, garnet, alexandrite, red (noble) spinel, euclase, topaz, aquamarine and others	12,0%
11.	Mineral raw materials containing semi-precious stones	Jade, jasper, jadeite, lapis lazuli, rhodonite, malachite, aventurine, agate, rhinestone, rose quartz, turquoise, dioptase, chalcedony and others	3,5%
12.	Mineral raw materials containing industrial stones	Industrial diamonds, agate, corundum, zircon, jasper, serpentinite, asbestos, mica and others	2,0%
13.	Other	Other non-metallic mineral raw materials that are not common minerals	4.7%, but not less than 0.02 MCI per volume unit

At the same time, the 0.01 coefficient is applied to the rate of the mineral extraction tax on mined hard coal (except for coking and anthracite), brown coal, oil shale, established by this article in the following cases:

1) the use by a subsoil user, which is a subject of a natural monopoly, of such mined hard coal, brown coal, oil shale for the provision of services for the transmission of electrical energy, production, transmission, distribution and (or) supply of thermal energy, water supply and (or) sanitation in accordance with the legislation of the Republic of Kazakhstan on natural monopolies;

2) the sale by the subsoil user of mined hard coal, lignite coal, oil shale to a natural monopoly entity providing the services provided for in subparagraph 1) of part two of this Article;

3) the sale by the subsoil user of mined hard coal, lignite, oil shale to educational and healthcare organizations;

4) use of mined coal, hard coal, brown coal, oil shale in the operation of social facilities, defined by Article 239 of this Code;

5) the sale by the subsoil user of mined hard coal, brown coal, oil shale to recipients of targeted social assistance;

6) processing by the subsoil user of mined hard coal, brown coal, oil shale and (or) their use for their own production needs;

7) use by a subsoil user, which is an energy-producing organization, of mined hard coal, brown coal, combustible shale for the production of electrical and (or) thermal energy for its own needs and (or) sale in accordance with the legislation of the Republic of Kazakhstan on the electric power industry;

8) the sale by the subsoil user of the mined coal of hard, brown coal, combustible shale to an energy-producing organization for the production of electrical and (or) thermal energy for its own needs and (or) sale in accordance with the legislation of the Republic of Kazakhstan on the electric power industry;

9) the sale by the subsoil user of mined hard coal, lignite, oil shale to organizations engaged in their processing and (or) use in the production of goods.

Unless otherwise provided by this article, the mineral extraction tax on all types of minerals and mineral raw materials extracted from the off-balance reserves of the deposit shall be paid at the rate of 0 percent.

At the same time, the rate of mineral extraction tax of 0 percent shall not be applied in the sale of minerals and mineral raw materials extracted from the off-balance reserves, including after primary processing (enrichment), except for cases of sale of minerals and mineral raw materials, extracted at low-margin deposits from the composition of off-balance reserves, for which the rate on mineral extraction tax is established in accordance with paragraph 2 of this article.

In the event that the amount of mineral extraction tax calculated in accordance with Articles 744 and 745 of this Code on non-metallic mineral raw materials indicated in line 13 of the table of paragraph 1 of this article is less than the sum of the product of the physical volume of such non-metallic mineral raw materials extracted by the subsoil user for the tax period and 0.02 of the monthly calculation index established by the law on the republican budget and effective as of January 1 of the corresponding financial year, the mineral extraction tax on such non-metallic mineral raw materials shall be determined at the rate of 0.02 of the monthly calculation index established by the law on the republican budget and effective as of January 1 of the relevant financial year, per unit of the volume of such non-metallic mineral raw materials extracted.

2. If the profitability level for a deposit (a group of deposits under one subsoil use contract, part of a deposit) that meets the criteria determined by the Government of the Republic of Kazakhstan in accordance with part two of paragraph 4 of Article 720 of this Code is 5 percent or less, the subsoil user of minerals produced at such a deposit (a group of deposits under one subsoil use contract, parts of a deposit) shall be entitled to apply the mineral extraction tax rates established by this Code as of December 31, 2022.

In case of actual non-compliance of a deposit (a group of deposits under one subsoil use contract, part of a deposit) with the low profitability criteria determined in accordance with part one of this paragraph, the subsoil user shall recalculate tax liabilities no later than the 15th day of the second month following the fourth quarter of the corresponding calendar year for mineral extraction tax on the basis of the rates established by paragraph 1 of this article for the entire year in which such criteria were not met, and shall reflect the received values in an additional declaration on mineral extraction tax for the fourth quarter. The amount of mineral extraction tax reflected in such a declaration is a tax liability for the fourth quarter and shall be payable to the budget in accordance with the generally established procedure.

The provisions of this paragraph shall also apply to deposits (a group of deposits under one subsoil use contract, part of a deposit) for which the subsoil use right has been re-registered (transition to a licensed subsoil use regime) or subsoil plots provided for exploration or production of solid minerals have been transformed (allocation of a subsoil plot).

3. The mineral extraction tax is calculated for a deposit (a group of deposits under one subsoil use contract, parts of a deposit) at 0 percent rate within sixty months from the date of commercial production commencement, subject to the following conditions:

1) commercial production of mineral raw materials at a deposit (a group of deposits under one subsoil use contract, part of a deposit) started after December 31, 2022;

2) the level of internal rate of return for a deposit (a group of deposits under one subsoil use contract, part of a deposit) does not exceed 15 percent;

3) the right to subsoil use for a deposit, for which the tax rate for the extraction of minerals, specified in part one of this paragraph, was applied, is not subject to alienation during the period of application of the provisions of this paragraph, with the exception of alienation in favor of a related entity.

For the purposes of this paragraph, the level of internal rate of return for a deposit (a group of deposits under one subsoil use contract, part of a deposit) shall be determined in accordance with the procedure specified in part two of paragraph 4 of Article 720 of this Code.

In case of non-compliance with the conditions established by subparagraphs 1) and 3) of part one of this paragraph, the mineral extraction tax shall be paid at the rates established in accordance with paragraph 1 or 2 of this article for the entire period of application of the provisions of this paragraph.

Upon reaching the level of the internal rate of return for a deposit (a group of deposits under one subsoil use contract, part of a deposit) of the indicator established by subparagraph 2) of this paragraph, the taxpayer shall recalculate tax liabilities on the mineral extraction tax no later than the 15th day of the second month following the fourth quarter of the corresponding calendar year. The specified recalculation of tax liabilities on the mineral extraction tax shall be made using the rates of the mineral extraction tax specified in paragraph 1 or 2 of this article for the entire year in which the level of internal rate of return exceeded fifteen percent, and shall be reflected in an additional declaration on mineral extraction tax for the fourth quarter of that year. The amount of mineral extraction tax reflected in such a declaration is a tax liability for the fourth quarter and shall be payable to the budget in accordance with the generally established procedure.

If in subsequent periods after recalculation of tax liabilities for the mineral extraction tax the level of the internal rate of return decreases below fifteen percent, the taxpayer is not entitled to apply the provisions of this paragraph for these subsequent periods.

Footnote. Article 746 as amended by the Law of the Republic of Kazakhstan dated 10.12.2020 No. 382-VI (shall come into effect from 01.01.2021); dated 11.07.2022 No. 135-VII (shall be enforced from 01.01.2023).

Clause 3. The mineral extraction tax on common minerals, groundwater and therapeutic muds