Article 11. Determining the interconnectedness of the parties Transfer Pricing Law

Home / RLA / Article 11. Determining the interconnectedness of the parties Transfer Pricing Law

Individuals and (or) legal entities that have special relationships that affect the economic results of transactions (operations) between them are recognized as interrelated parties.

Such special relationships include the following conditions:

1) one person is recognized as an affiliated person of another person;

2) the person is a major shareholder, a major participant (owning ten percent or more of the voting shares or participation interests) of the participant in the transaction;

3) the person is interconnected with the participant in the transaction by an agreement, including the trust management of property, according to which he has the right to determine the decisions taken by the trustee.;

4) the owner of the property is interconnected with the person to whom one or more powers of the owner of the property have been transferred in relation to this property (possession, use, disposal), including on the basis of a trust management agreement for the property, according to which the owner has the right to determine the decisions taken by such a person.;

5) the person is an official of the participant in the transaction or a legal entity specified in the sub-paragraphs 2), 3), 6) - 10) of this article, with the exception of the independent director;

6) a legal entity is controlled by a person who is a major shareholder, a major participant or an official of the participant in the transaction;

7) a legal entity in relation to which a person who is a major shareholder, major participant, or official of a participant in a transaction is a major shareholder, major participant, entitled to a corresponding share in the property;

8) a legal entity in relation to which the participant in the transaction is a major shareholder, a major participant entitled to a corresponding share in the property;

9) the legal entity, together with the participant in the transaction, is under the control of a third party;

10) a person independently or jointly with his affiliated persons owns, uses, disposes of ten or more percent of the voting shares or participation interests of the participant in the transaction or of the legal entities specified in the subitems 2), 3), 6) - 9) this article;

11) an individual is a close relative (parent, son, daughter, adoptive parent, adopted child, brother, sister, grandmother, grandfather, grandson), as well as a relative (brother, sister, parent, son or daughter of the spouse of an individual who is a major shareholder, major participant or official, except for excluding the independent director of the participant in the transaction;

12) two trust managers are interconnected if the same person is the founder of the trust management under both trust management agreements and has the opportunity to determine the decisions taken by them.;

13) the trustee and the organization in which the founder of the trust management is a major shareholder or a major participant (owning ten or more percent of the voting shares or participation interests), if the founder of the trust management has the opportunity to determine the decisions taken by the trustee;

14) the trustee under one property trust management agreement and the beneficiary under another property trust management agreement are recognized as interrelated if the founder of the trust management under both property trust management agreements is the same person who has the ability to determine the decisions taken by the trustee.;

15) Excluded by the Law of the Republic of Kazakhstan dated 03/25/2024 No. 68-VIII (effective sixty calendar days after the date of its first official publication).

16) a person produces or sells products using intangible assets and (or) intellectual property rights of another person and his related party, for which he must make payments totaling more than fifty percent of the initial cost (or prime cost) of such products.;

17) a person and (or) his related party supply more than fifty percent of the total cost of raw materials, supplies or initial products (excluding depreciation of fixed assets) used by another person for the production of finished products;

18) a person and (or) his related party generate more than fifty percent of the other person's revenue for the reporting calendar year for transactions that are international business transactions;

19) a person whose total debt to another person as of the date of the transaction or the revision of the basic terms of the transaction exceeds fifty percent of equity or at least ten percent of the total debt at the end of the reporting calendar year is guaranteed by another person, except in cases where one of the persons is an independent international financial organization or a government institution of a foreign state, as well as cases when one of the persons has a license to conduct banking and other operations., issued in the Republic of Kazakhstan or a foreign country;

20) a person who has been granted rights for the reporting calendar year as an agent, distributor or dealer of the company when buying or selling goods (works, services) in accordance with a written agreement.

The conditions stipulated in subparagraphs 16) – 20) of part two of this article do not apply to a non–resident participant in the transaction.:

whose financial statements are published in accordance with international Financial Reporting Standards (hereinafter – IFRS) in the public domain and (or) are presented on the stock exchanges of the member countries of the Organization for Economic Cooperation and Development (hereinafter – OECD);

which is a member of an international group whose financial statements are publicly available in accordance with IFRS and/or are listed on the stock exchanges of the OECD member countries;

the financial statements of which are submitted to the authorized body upon its request no later than sixty calendar days from the date of receipt of the request. At the same time, the financial statements must be confirmed by an independent auditing organization.

The Law of the Republic of Kazakhstan dated July 5, 2008 No. 67-IV.

President

Republic of Kazakhstan

Constitution Law Code Standard Decree Order Decision Resolution Lawyer Almaty Lawyer Legal service Legal advice Civil Criminal Administrative cases Disputes Defense Arbitration Law Company Kazakhstan Law Firm Court Cases