Commentary on Article 221. Evasion by a Citizen of Payment of Taxes of the Criminal Code of the Republic of Kazakhstan
1. Evasion by a citizen of payment of a tax or other mandatory payments to the state budget by failing to submit an income declaration in cases where submission of such a declaration is mandatory, or by including knowingly distorted information about income or expenses or about property subject to taxation in a declaration or other documents related to the calculation or payment of taxes or other mandatory payments to the state budget, if this act has resulted in non-payment of tax or mandatory payments on a large scale, —
shall be punishable by a fine in the amount of two hundred to one thousand monthly calculation indices or in the amount of the salary or other income of the convicted person for a period of two to ten months, or by involvement in community service for a period of one hundred and eighty to two hundred and forty hours, or by corrective labour for a period of up to two years, or by arrest for a period of up to four months, or by deprivation of liberty for a period of up to two years with a fine in the amount of up to two hundred monthly calculation indices or in the amount of the salary or other income of the convicted person for a period of up to two months, or without such a fine.
2. The same act committed by a person previously convicted of evasion of payment of taxes, —
shall be punishable by a fine in the amount of five hundred to three thousand monthly calculation indices or in the amount of the salary or other income of the convicted person for a period of five months to one year, or by corrective labour for a period of up to two years, or by deprivation of liberty for a period of up to three years with a fine in the amount of up to three hundred monthly calculation indices or in the amount of the salary or other income of the convicted person for a period of up to three months, or without such a fine.
Note. Non-payment by a citizen of taxes or other mandatory payments to the state budget shall be deemed to have been committed on a large scale if the amount of unpaid tax or mandatory payments exceeds five hundred monthly calculation indices.
According to Article 35 of the Constitution of the Republic of Kazakhstan, every citizen is obliged to pay legally established taxes, fees and other mandatory payments. The procedure for payment of taxes by individuals is regulated by the Code of the Republic of Kazakhstan “On Taxes and Other Mandatory Payments to the Budget” (Tax Code of the Republic of Kazakhstan) dated June 12, 2001 (as subsequently amended and supplemented). Payment of taxes essentially encompasses all types of activities of a citizen associated with receiving income, in respect of which, on various grounds and in accordance with the law, an obligation to submit a tax declaration of aggregate annual income is предусмотрено. The income tax declaration shall be submitted to the tax committee at the place of permanent residence of the individual no later than March 31 of the year following the reporting year. K080000099_
The public danger of tax crimes is determined by the high significance of taxes in the economic activities of society, as a result of which significant damage is caused to the economy of our state.
The object of the crime is public relations concerning the implementation of the financial activities of the state based on law.
The basis for the assessment and payment of income tax is the income declaration — a written statement by the taxpayer on a prescribed form concerning the income received and expenses incurred, sources of income, transactions with interdependent persons, tax benefits and the calculated amount of tax (fee), as well as other data related to the calculation and payment of tax (fee) for the preceding period (quarter, half-year). A tax declaration shall be submitted by each taxpayer for each tax (fee) in respect of which they are recognized as a taxpayer, unless otherwise established by tax legislation. The tax declaration shall be submitted to the tax authorities at the place where the taxpayer is registered, in the form established by law.
The objective side of the crime is expressed in evasion of tax payment by way of inaction, consisting of failure to submit an income declaration in cases where submission of the declaration is mandatory; or by way of action, consisting in actual intellectual forgery, i.e. the inclusion in the declaration of knowingly distorted information about income or expenses.
According to the Tax Code of the Republic of Kazakhstan dated June 12, 2001 (as subsequently amended and supplemented), taxes are understood as mandatory monetary payments established by the state unilaterally by law, made to the budget in specified amounts and being non-refundable and gratuitous in nature. K080000099_
Other mandatory payments are understood as mandatory monetary contributions (fees, duties, payments) to the budget, made in specified amounts. K080000099_
In the declaration, an individual, under their own responsibility, indicates all income received by them during the year and subject to taxation, as well as the sources from which such income was obtained. Submission of an income and expenditure declaration is mandatory for citizens whose aggregate income reaches the level determined by the tax legislation of the Republic of Kazakhstan, as well as for those who have several sources of taxable income or have such sources in addition to their principal place of employment. The object of taxation for citizens of the Republic of Kazakhstan is their annual income received from sources within the Republic of Kazakhstan and beyond its borders, both in monetary and in-kind form, including in the form of material benefits; for individuals who do not have a permanent place of residence in the Republic of Kazakhstan — income from sources within the Republic of Kazakhstan. Aggregate annual income is the income of a person from various sources during a calendar year. It includes all types of income, including:
- income received in the form of remuneration for labour and pension payments;
- income from entrepreneurial activity;
- property income.
According to the Law of the Republic of Kazakhstan “On Public Service” dated July 23, 1999 (as subsequently amended and supplemented) and Article 9 of the Law of the Republic of Kazakhstan “On Combating Corruption” dated July 2, 1998 (as subsequently amended and supplemented), civil servants and other persons performing state functions are obliged to declare their income. The declaration shall be submitted to the tax authority at the place of permanent residence no later than the deadline established by tax legislation following the reporting year. Individuals who during the specified period had income only from their principal place of employment, as well as persons whose taxable aggregate income for the reporting period did not exceed the amount established by law, are exempt from submitting a declaration.*
Evasion — by virtue of its objective orientation towards the failure to perform mandatory actions — presupposes the existence of additional conditions under which failure to submit a declaration turns into evasion of tax payment. Such mandatory conditions are: expiration of the deadline for submitting the declaration; the availability of an opportunity to submit the declaration; actions by the tax committee encouraging the submission of the declaration.
The inclusion in a declaration of knowingly distorted information about income or expenses is understood as the entry into tax documents of information that does not reflect the actual state of affairs regarding the profit received and the expenses incurred in connection with it, i.e. the person's prior and sufficient awareness that the information being entered does not correspond to actual circumstances. Distortion of information may be carried out by: concealing or understating the income received; concealing or incorrectly indicating the sources of income; exaggerating the expenses incurred, etc. The mandatory characteristic here is the deliberate nature of the actions, i.e. the person's knowledge that the information included in the declaration is distorted. Knowingly distorted information is information based on the intentional distortion or disregard of facts, for example, understated information about accrued income. Information obtained as a result of a gross arithmetic error, a disputed interpretation of the legal nature of facts affecting the tax calculation process, as well as in cases of ambiguous wording of legislative provisions, shall not be considered knowingly distorted.
The crime shall be considered completed from the moment of non-payment of tax on a large scale upon expiration of the deadline for submitting the declaration or upon inclusion of knowingly distorted information in the declaration. According to the note to this Article, non-payment of tax shall be deemed to have been committed on a large scale if the amount of unpaid tax exceeds five hundred monthly calculation indices established by the legislation of the Republic of Kazakhstan at the time the crime was committed. Moreover, the act shall be considered completed:
a) in the case of evasion of tax payment by failing to submit an income declaration — from the month of April following the reporting year;
b) in the case of evasion of tax payment by including knowingly distorted information about income and expenses in the declaration — upon expiration of 10 days from the date of submission of such declaration.
It should be taken into account that minor inaccuracies made by a taxpayer when preparing an income declaration (typographical errors, corrections, arithmetic errors), as well as a short delay in submitting the declaration, do not constitute the elements of the crime provided for by Article 221 of the Criminal Code of the Republic of Kazakhstan.
The subject of the crime is a sane individual who has reached the age of 16, has independent income and is obliged, in accordance with tax legislation, to submit a declaration to the tax authorities.
From the subjective side, the crime is committed only with direct intent. The perpetrator realizes that they are evading payment of tax on a large scale by failing to submit an income declaration to the tax authorities or by including knowingly distorted information about income or expenses therein, foresees the possibility of non-payment of tax on a large scale, and desires to evade tax payment. This crime is committed with a mercenary motive. The purpose of the criminal actions is to evade the fulfilment of obligations to pay income tax, followed by the use of the concealed funds at one's own discretion.*
A qualified form of evasion by a citizen of payment of taxes is the commission of this act by a person previously convicted of evasion of tax payment, provided that the conviction for the previous crime has not been expunged or removed in accordance with the procedure established by law.
However, the question arises as to whether a person's conviction under Article 222 of the Criminal Code of the Republic of Kazakhstan, “Evasion of Tax Payment by Organizations”, will constitute a qualifying element in the crime under consideration. We believe that it will not, because, firstly, for the application of Part 2 of Article 221 of the Criminal Code of the Republic of Kazakhstan, conviction for an identical crime is required, i.e. under Part 1 of the same Article. Secondly, Articles 221 and 222 of the Criminal Code of the Republic of Kazakhstan presuppose different purposes and motives. In the first case, evasion of tax payment is carried out for the purpose of leaving the funds with an individual, whereas in the second case — for the purpose of leaving them with the organization. Thirdly, the aforementioned Articles contain different material elements of the crime. Under Article 221 of the Criminal Code of the Republic of Kazakhstan, liability arises for evasion of tax payment in an amount exceeding five hundred monthly calculation indices, whereas under Article 222 of the Criminal Code of the Republic of Kazakhstan — in an amount exceeding two thousand monthly calculation indices. Fourthly, in the note to Article 221 of the Criminal Code of the Republic of Kazakhstan, the expression “unpaid tax” is used in the singular.
Commentary of 2007 to the Criminal Code of the Republic of Kazakhstan by Honoured Figure of Kazakhstan, Doctor of Law, Professor, Academician of the Kazakhstan National Academy of Natural Sciences I.SH. BORCHASHVILI
Date of amendment of the act: 02.08.2007
Date of adoption of the act: 02.08.2007
Place of adoption: NONE
Authority that adopted the act: 180000000000
Region of application: 100000000000
Registration number of the normative legal act assigned by the rule-making authority: 167
Status of the act: new
Scope of legal relations: 028000000000
Form of the act: COMMENTARY
Legal force: 1900
Language of the act: Russian
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