THE TAX SYSTEM OF THE REPUBLIC OF KAZAKHSTAN:
GENERAL INFORMATION
JANUARY 2006
Part 3
Excise taxes -
Payers: Individuals and legal entities including nonresident legal entities and their structural subdivisions who:
- Produce excisable goods on the territory of the Republic of Kazakhstan;
- Import excisable goods onto the customs territory of the Republic of Kazakhstan;
- Are engaged in wholesale or retail trade in gasoline (with the exception of aviation fuel) and diesel fuel on the territory of the Republic of Kazakhstan;
- Are engaged in the realization of confiscated, unclaimed excisable goods, as well as excisable goods inherited by the state and transferred to the state as a gift, on the territory of the Republic of Kazakhstan, if excise taxes were not previously paid on said goods on the territory of the Republic of Kazakhstan in accordance with the legislation of the Republic of Kazakhstan;
- Are engaged in excisable activities on the territory of the Republic of Kazakhstan.
Objects of taxation:
- Excisable goods: All types of spirits; alcohol products; tobacco products; other articles containing tobacco; gasoline (with the exception of aviation fuel), diesel fuel; passenger cars (other than cars with hand-operated controls specially designed for disabled persons); crude oil, gas condensate;
- Excisable activities: Gambling business; the organization and holding of lotteries.
Tax rates: Are set by the Republic of Kazakhstan government and shall be established as a percentage of the value of the goods (ad valorem) and/or as an absolute amount per unit of measure in physical terms (fixed). Excise tax rates on alcohol products are set on the basis of their absolute (100-percent) alcohol content by volume. Excise tax rates for all types of spirits are differentiated depending on the purposes for which the spirits will subsequently be used. The Republic of Kazakhstan government establishes maximum and minimum levels of the basic excise tax rate calculated on an annual basis for objects involved in the gambling business.
Rent tax on exported crude oil, gas condensate -
Payers: Individuals and legal entities who sell crude oil or gas condensate for export, with the exception of subsurface users concluded subsurface use contracts.
Object of taxation: Volume of crude oil or gas condensate that is sold for export.
Tax rates: Depending on market price of a barrel - from 0 per cent (when a barrel's price is less than USD 19) to 33 per cent (when a barrel's price is more than USD 40).
Taxes and special payments of subsurface users -
Payers: Subsurface users.
Object of taxation: There are two models of taxation:
- The first model provides for payment by the user of mineral resources of all types of taxes and other mandatory payments established by the Tax Code, with the exception of the Republic of Kazakhstan's share under the production sharing arrangement;
- The second model provides for payment (transfer) by the subsurface user the Republic of Kazakhstan's share under a production sharing arrangement, as well as payment of all types of taxes and other mandatory payments established by the Tax Code, with the exception of: the rent tax on exported crude oil, gas condensate; the royalty; the excise tax on crude oil and gas condensate; the excess profits tax; the land tax; the property tax.
Tax rates: The system of subsurface users' withdrawals is as follows:
- The tax on excess profit (called the 'special tax of subsurface users') - from 0 to 60 per cent;
- Special payments applied to subsurface users:
The Republic of Kazakhstan share under production sharing - is set in the contract;
A royalty - for crude oil and gas condensate is from 2 to 6 per cent; for solid minerals, including gold, silver, platinum, and other precious metals and precious stones - is set by the Republic of Kazakhstan government.
A bonus:
A signing bonus - the final amount of a signing bonus is established by the commission as a result of a competition of investment programs for obtaining subsurface usage right and is set in a contract taking into account the economic value of the deposits (territories) being turned over for mining operations, but it must not be less than the initial amounts.
A commercial discovery bonus - the amount of a commercial discovery bonus shall be determined in accordance with the object of taxation, the calculation base, and the rate;
An additional payment of a subsurface user doing business under a production sharing arrangement - in case that state returns in a tax period are less than 10 per cent before the reimbursement of invested funds, and less than 40 per cent in following periods of the cost of gross value of extracted production received by the subsurface user in the tax period, the respective difference is paid by the subsurface user.
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