According to the Tax Code, the commercial discovery bonus is paid by the subsurface user under a mining contract or for combined exploration and production for each commercial discovery of minerals in the contract territory.
According to Article 318 of the Tax Code, the payers of the commercial discovery bonus are subsurface users who have announced the commercial discovery of minerals in the contract territory. The object of bonus taxation, as specified in Article 319 of the Tax Code, is the physical volume of mineral reserves, which is approved by the authorized body for these purposes in this contract area. Recognizing the arguments of C LLP as justified and the illegal accrual of the commercial discovery bonus for four deposits: Kyzylzhar 1 Vostochny, Sagiz Zapadny, Baichunas Zapadny, and Uytas for a total amount of 190,586,843 tenge and the corresponding penalty amount, the Astana City Court proceeded from the fact that the protocols of the GKZ dated 29 In September 2012, No. 1202-12-P, dated November 27, 2012, No. 1237-12-P, dated November 27, 2012, No. 1238-12-P and dated May 27, 2014, No. 1418-14-P, mineral reserves were accepted into the state balance sheet without their approval. The tax authority has not provided evidence of the announcement of a commercial discovery for the above-mentioned deposits in accordance with the requirements of Articles 317-318 of the Tax Code. The specialized judicial board considered the above conclusions of the court of first instance to be erroneous, contrary to the norms of substantive law and the factual circumstances of the case. In accordance with subparagraph 54) of Article 1, Article 121 of the Law "On Subsoil and Subsoil Use", commercial discovery is the discovery of deposits of commercial interest, confirmed by the state examination of the subsoil, which is carried out by the State Commission on Mineral Reserves of the Republic of Kazakhstan. In turn, the GKZ, as part of the ongoing examination, issues a conclusion on the profitability of the explored mineral reserves, which is the basis for placing them on the state balance sheet and confirms the fact of commercial discovery as a result of exploration in the contract territory. The results of the examination according to the rules of paragraphs 6 and 17 of the Regulation on the State Commission on Mineral Reserves of the Republic of Kazakhstan and Interregional Commissions on Mineral Reserves, approved by Resolution of the Government of the Republic of Kazakhstan dated February 8, 2011 No. 87 (hereinafter referred to as the Regulation on the GKZ), are formalized in a protocol, which should reflect data on the approval of reserves, their distribution by categories, volumes and timing of pilot production, as well as recommendations and decisions on other issues within the competence of the GKZ.
According to the Tax Code, the commercial discovery bonus is paid by the subsurface user under a mining contract.
Thus, the document for placing reserves on the State Balance Sheet of Mineral Reserves of the Republic of Kazakhstan and declaring them as a commercial discovery is the GKZ protocol, which indicates profitable proven mineral reserves. The physical volumes of extracted minerals of categories A, B, C, C1, C2, indicated in the GKZ protocol, are subject to the commercial discovery bonus regardless of the category (K, A, P, U, etc.). The Partnership has submitted reports to the GKZ with calculations of oil and gas reserves for the KV fields, "NW", "BZ", "U". According to GKZ protocols No. 1202-12-P dated September 29, 2012, No. 1237-12-P dated November 27, 2012, No. 1238-12-P dated November 27, 2012, and No. 1418-14-P dated May 27, 2014, recoverable reserves of category C1 and C2 at these fields were calculated, indicating the CIN, and accepted on the State Balance Sheet.. These Protocols are a positive conclusion of the state expertise. Thus, the board considers that the above evidence indicates the presence of a commercial volume of minerals at the deposit suitable for extraction. The Board considers the conclusions of the court of first instance on the absence of a commercial discovery announcement by the partnership to be unlawful, since the fact of commercial discovery was confirmed by the positive conclusion of the GKZ. Therefore, by virtue of paragraph 1 of Article 317 of the Tax Code, the partnership is obliged to pay a bonus based on the volume of oil and gas specified in it. In such circumstances, the notification in the contested part is justified, and the arguments of the Department's appeal and the prosecutor's appeal have been confirmed.
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