Disputes on the appeal of an order to conduct an unscheduled tax audit.
By the decision of the Council of Ministers of the Aktobe region dated September 14, 2020, left unchanged by the decision of the court of appeal on November 10, 2020, the application of BAITAU LLP for recognition as illegal and cancellation of the order of the RSU "DGD for the Aktobe region" was left without satisfaction.
It follows from the case file that on June 22, 2020, the Department issued order No. 173 on conducting an unscheduled tax thematic audit of the Partnership on the fulfillment of tax obligations for certain types of taxes and other mandatory payments to the budget.: CPN and VAT.
The period under review is from January 2018 to December 31, 2018.
The order was registered with the Department of Legal Statistics and Special Accounts for the Aktobe region on June 24, 2020, and handed over to the head of the Partnership, R. Ubaydullaev, on July 1, 2020.
The basis for the appointment of a tax audit was the resolution of the investigator of the Department of Economic Investigations in the Karaganda region dated April 22, 2020.
In accordance with subparagraph 4) Paragraph 1 of the Decree of the President of the Republic of Kazakhstan "On the introduction of a moratorium on preventive monitoring and supervision of visits in the Republic of Kazakhstan" dated December 26, 2019 No. 229 in order to improve conditions for the development of small businesses, including microenterprises, in the Republic of Kazakhstan, the central state and local executive bodies decided to terminate from January 1, 2020 until January 1, 2023, inspections and preventive control and supervision with visits to small businesses, including microenterprise entities, with the exception of inspections on the grounds provided for by the Criminal Procedure Code of the Republic of Kazakhstan (hereinafter referred to as the CPC).
According to subparagraph 3) of paragraph 3 of Article 145 of the Tax Code, unscheduled tax audits are inspections, including those carried out on the grounds provided for in the CPC.
By virtue of subparagraph 9) of paragraph 3 of Article 144 of the Business Code, the grounds for an unscheduled inspection of subjects of control and supervision are instructions from the criminal prosecution authority on the grounds provided for in the CPC.
In accordance with article 122 of the CPC, in cases requiring urgent investigative actions, failure to comply with which may result in the concealment or destruction of documents, the criminal prosecution body has the right to initiate a tax audit of the person to whom fictitious invoices were issued, and to require audits and inspections from authorized bodies and officials.
The Department of Economic Investigations in the Karaganda region is conducting a pre-trial investigation against unidentified persons upon the issuance of fictitious invoices on behalf of 18 legal entities, including from MDM LLP, KazKemp LLP, Halyk Element LLP.
BAITAU LLP had settlements with these organizations.
Thus, the basis for the appointment of this tax audit was the decision of the criminal prosecution authority, which complies with the above-mentioned legal requirements.
Regulatory and legal framework
In accordance with Article 2 of the Code of the Republic of Kazakhstan dated December 25, 2017 "On Taxes and other mandatory payments to the Budget (Tax Code)", the tax legislation of the Republic of Kazakhstan is based on the Constitution of the Republic of Kazakhstan, consists of this Code, as well as regulatory legal acts, the adoption of which is provided for by this Code.
If an international treaty ratified by the Republic of Kazakhstan establishes rules other than those contained in the Tax Code, the rules of the said treaty shall apply.
The main regulatory legal acts that courts should follow when considering cases related to the application of tax legislation are:
1. The Constitution of the Republic of Kazakhstan dated August 30, 1995;
2. The Code of the Republic of Kazakhstan "On Taxes and other Mandatory Payments to the Budget (Tax Code)" (hereinafter – NC);
3. The Civil Code of the Republic of Kazakhstan (hereinafter referred to as the Civil Code) (General Part) dated December 27, 1994, (Special Part) dated July 1, 1999;
4. The Civil Procedure Code of the Republic of Kazakhstan (hereinafter – CPC) dated October 31, 2015;
5. The Business Code of the Republic of Kazakhstan (hereinafter referred to as the Business Code) dated October 29, 2015;
6. The Law of the Republic of Kazakhstan "On Permits and Notifications" dated May 16, 2014;
7. The Law of the Republic of Kazakhstan "On Accounting and Financial Reporting" dated February 28, 2007;
8. The Law of the Republic of Kazakhstan "On State Registration of Legal Entities and Registration of branches and representative Offices" dated April 17, 1995;
9. Regulatory rulings of the Supreme Court of the Republic of Kazakhstan (hereinafter – NP):
- "On judicial practice of tax legislation application" dated June 29, 2017 No. 4;
- "On the application by courts of certain norms of civil procedural legislation" dated March 20, 2003 No. 2;
- "On some issues of the invalidity of transactions and the application by courts of the consequences of their invalidity" dated July 7, 2016 No. 6;
- "On some issues of application by courts of the norms of Chapter 29 of the CPC" dated December 24, 2010 No. 20;
Resolutions of the Government of the Republic of Kazakhstan, regulatory legal orders of the authorized body in the system of state revenue bodies.
Summary from the Supreme Court of the Republic of Kazakhstan on the judicial practice of applying tax legislation for 2020 and 3 months of 2021 dated July 9, 2021
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