Article 723-1. Features of tax accounting when reissuing subsoil use rights to the subsoil use license regime code of the Republic of Kazakhstan on taxes and other mandatory payments to the budget (tax code)    

To recognize as invalid the Code of the Republic of Kazakhstan (tax code) of December 25, 2017 "on taxes and other mandatory payments to the budget" from January 1, 2026 in connection with the entry into force of the tax code of the Republic of Kazakhstan dated July 18, 2025 No. 214-VIII. 

     1. In accordance with the legislation of the Republic of Kazakhstan On Subsoil and subsoil use, in case of re-registration of the subsoil use right from a subsoil use contract to a subsoil use license regime, the reissued Subsoil Use Contract and the Subsoil Use License received in its place are collectively considered as a single Subsoil Use Contract for the purpose of, and the activity of a subsoil user under a reissued contract for subsoil use and within the framework of a license for subsoil use of this subsoil user is considered as a single contractual activity in which a single separate tax accounting is carried out.

     If, when reissuing a subsoil use right, a subsoil user is granted two or more subsoil use licenses instead of a subsoil use contract, a subsoil use contract is referred to as a subsoil use contract for the tax period during which the subsoil use contract was reissued. – In accordance with paragraphs 7, the license is understood in aggregate as a part corresponding to the objects of taxation and (or) objects related to taxation, and the specified subsurface use license. Accordingly, during the tax period in which the contract for subsoil use was reissued, the activities of the subsoil user under each license received for subsoil use and the corresponding part of the activities of the subsoil user under the reissued contract for subsoil use are collectively considered as a separate single contractual activity, in which separate tax accounting is carried out.

     2. In accordance with the legislation of the Republic of Kazakhstan On Subsoil and subsoil use, when reissuing a subsoil use right from a subsoil use contract to a subsoil use license regime, the objects of taxation under a reissued contract and (or) objects related to taxation are taxable objects and (or) objects related to taxation under a license received instead of a reissued contract from the beginning of is recognized.  

     If, when reissuing the right to subsurface use, a subsurface user is issued two or more licenses for subsurface use instead of a contract for subsurface use, objects of taxation and (or) objects related to taxation, taken into account in tax accounting under a contract reissued for subsurface use, are subject to redistribution from the beginning of the tax period during which the specified reissue of the right to subsurface use was carried out, to licenses obtained in accordance with paragraph 3 of this article, and are hereinafter taken into account when conducting separate tax accounting, respectively, for activities under each subsurface use license.  

     3.the distribution of gross and indirect income and expenses of a subsoil user from the beginning of the relevant tax period to the date of renewal of the subsoil use contract to the licensing regime is carried out in accordance with paragraphs 8, 9, 10 and 11 of Article 723 of this code.  

     At the same time, no later than March 31 of the year following the year of renewal of subsurface use rights, the taxpayer shall notify the Tax Authority of the selected methods of distribution that are not subject to revision and change in accordance with paragraph 11 of Article 723 of this code.

     In the absence of such notification within the terms specified in the first part of paragraph 7 of this article, the method specified in subitem 1) of the first part of paragraph 11 of Article 723 of this Code shall be used for the purpose of separation.

     4.the distribution of the value balance of a subgroup (Group I), group of depreciable assets formed under a reissued contract for subsurface use, as well as a separate group of depreciable assets specified in Article 258 of this Code, shall be carried out as of January 1 of the year in which the reissue of the right of subsurface use is carried out. At the same time, depreciable assets included in the specified value balance of a subgroup (Group I), group of depreciable assets must be classified as direct, indirect and general in accordance with paragraphs 8 and 11 of Article 723 of this code.

     5.the funds of the accumulated liquidation fund as of January 1 of the year in which the subsoil use right was reissued are subject to distribution for licenses in accordance with paragraph 11 of Article 723 of this code and are included in the annual total income of such licenses in the year in which such subsoil use rights were reissued.

     6. in case of accumulated losses from previous tax periods within the framework of the contract reissued for subsoil use at the beginning of the tax period during which the contract for subsoil use was reissued to the license regime of subsoil use, these losses are accounted for in the following order:

     if a subsurface user receives one subsurface use license – during the tax period in which the contract for subsurface use was reissued, and in case of incomplete use, they are replaced for reimbursement at the expense of taxable income received from activities under the specified license within the period determined in accordance with Article 300 of this code;

      in case of obtaining two or more licenses for subsurface use – taking into account the provisions of paragraph 11 of Article 723 of this code and the tax accounting policy of the subsurface user for the licenses received, the contract for subsurface use is allocated as of January 1 of the year in which the reissue was carried out, shall be accounted for in the relevant part for each license in the specified tax period and shall be transferred for further compensation at the expense of taxable income received from activities under the relevant license within the period determined in accordance with Article 300 of this code.  

     7. Distribution of the total and indirect value balances of subgroups (Group I), groups specified in paragraph 4 of this article, funds accumulated in the liquidation fund specified in paragraph 5 of this article, as well as losses specified in paragraph 6 of this article by the subsoil user 1) – 5) according to the same method of distribution, independently chosen from the methods provided for in subitems, the taxpayer shall notify the tax authority no later than March 31 of the year following the year in which the right to subsurface use was reissued and shall not be subject to revision and modification.

     In the absence of such notification within the time limits specified in part one of this paragraph, the method specified in subparagraph 1) of part one of paragraph 11 of Article 723 of this Code shall be used for the purpose of separation.

     Warning. Chapter 82 was supplemented by Article 723-1 by the law of the Republic of Kazakhstan dated 10.12.2020 No. 382 – VI (effective from 01.01.2021).  

 President    

Republic of Kazakhstan     

© 2012. RSE na PHB "Institute of Legislation and Legal Information of the Republic of Kazakhstan" of the Ministry of Justice of the 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