On Ratification of the Protocol on Amendments to the Agreement between the Republic of Kazakhstan and the Russian Federation on the Status of the City of Baikonur, the Procedure for the Formation and Status of its Executive Authorities dated December 23, 1995

The Law of the Republic of Kazakhstan dated November 24, 2016 No. 22-VI SAM.

PRESS RELEASE

      To ratify the Protocol on Amendments to the Agreement between the Republic of Kazakhstan and the Russian Federation on the Status of the City of Baikonur, the Procedure for the Formation and Status of its Executive Authorities dated December 23, 1995, signed in Moscow on April 12, 2016.

President

Republic of Kazakhstan

N. NAZARBAYEV

PROTOCOL on Amendments to the Agreement between the Republic of Kazakhstan and the Russian Federation on the Status of the City of Baikonur, the Procedure for the Formation and Status of its executive authorities dated December 23, 1995

     (Entered into force on July 5, 2017 - Bulletin of International Treaties of the Republic of Kazakhstan 2017, No. 4, Article 49)

     The Republic of Kazakhstan and the Russian Federation, hereinafter referred to as the Parties,

      in accordance with article 24 of the Agreement between the Republic of Kazakhstan and the Russian Federation on the Status of the City of Baikonur, the Procedure for the Formation and Status of its Executive authorities dated December 23, 1995 (hereinafter referred to as the Agreement),

     Reaffirming the desire to further strengthen cooperation in ensuring the functioning of the Baikonur complex, based on the principle of mutual respect for the interests of the two States,

     have agreed on the following:

Article 1

      In paragraph 2 of Article 10 of the Agreement, the words "also in the administration of the city of Baikonur" should be replaced by the words "in the tax authority of the city of Baikonur".

Article 2

     To supplement the Agreement with Article 12-1 as follows:

     "Article 12-1

     The use of indirect taxes on the sale and import of goods

     1. Turnover (operations) for the sale of goods carried out between an individual entrepreneur or a legal entity registered with the tax authority of the city of Baikonur and an individual entrepreneur or a legal entity registered in another territory of the Republic of Kazakhstan in the case of export of goods from the territory of the city of Baikonur to another territory of the Republic of Kazakhstan or export of goods from another territory of the Republic of Kazakhstan to the territory of The cities of Baikonur are subject to value added tax (hereinafter referred to as - VAT) at a zero rate and are exempt from paying excise taxes on excisable goods. When carrying out such operations, these persons are entitled to tax deductions (offsets) in a manner similar to that provided for by the legislation of the Republic of Kazakhstan and the Russian Federation applicable to goods exported from the territory of these states outside the Eurasian Economic Union.

     The validity of the application of the zero VAT rate and (or) exemption from excise duties on exported goods is confirmed by the documents provided for in paragraph 5 of this Article.

     2. The import of goods into another territory of the Republic of Kazakhstan from the territory of the city of Baikonur is subject to indirect taxes at the rates established by the Tax Code of the Republic of Kazakhstan, levied by the tax authorities of the Republic of Kazakhstan and paid to the budget of the Republic of Kazakhstan, with the exception of goods that, in accordance with the legislation of the Republic of Kazakhstan, are not subject to taxation (exempt from taxation) upon import.

     3. The import of goods into the territory of the city of Baikonur from another territory of the Republic of Kazakhstan is subject to indirect taxes at the rates established by the Tax Code of the Russian Federation, levied by the tax authority of the city of Baikonur, with the exception of goods that, in accordance with the legislation of the Russian Federation, are not subject to taxation (exempt from taxation) when imported into the territory of the Russian Federation and other territories under its jurisdiction.

     4. Indirect taxes are not levied on the import of goods to another territory of the Republic of Kazakhstan from the territory of the city of Baikonur (to the territory of the city of Baikonur from another territory of the Republic of Kazakhstan) in connection with the transfer of goods within the same legal entity (the legislation of the Parties may establish an obligation to notify tax authorities on import (export) such products).

     5. The documents confirming the validity of the application of the zero VAT rate and (or) exemption from excise taxes are:

     1) agreements (contracts) on the basis of which goods are sold and exported to (from) the territory of the city of Baikonur from another territory of the Republic of Kazakhstan (copies thereof, if provided for by the legislation of the Parties);

     2) a bank statement confirming the actual receipt of proceeds from the sale of goods, unless otherwise provided by the legislation of the Parties;

     3) an application for the import of goods and payment of indirect taxes with a note from the tax authority of the Republic of Kazakhstan or the tax authority of the city of Baikonur at the location (residence) of the buyer of the goods for the payment of indirect taxes (exemption or other procedure for fulfilling tax obligations) (hereinafter referred to as the application) or a list of applications (on paper or in electronic form with electronic (electronically-digitally signed by the taxpayer). The forms of the application and the list of applications, as well as the procedure for filling them out and formats are determined by the regulatory legal acts of the tax authorities of the Parties or other regulatory legal acts of the Parties.;

     4) transport (shipping) and (or) other documents confirming the export of goods from the territory of the city of Baikonur to another territory of the Republic of Kazakhstan or the export of goods from another territory of the Republic of Kazakhstan to the territory of the city of Baikonur;

     5) other documents confirming the validity of applying the zero VAT rate and (or) exemption from excise taxes, if this is provided for by the tax legislation of the Parties when exporting goods.

      6. The application and collection of indirect taxes in respect of goods in the cases specified in paragraphs 1-3 of this Article and the mechanism for monitoring their payment upon import (export) of goods to (from) the territory of the city of Baikonur from another territory of the Republic of Kazakhstan are carried out similarly to the procedure established by the Treaty on the Eurasian Economic Union of 29 May 2014.

     7. When selling goods on the territory of the city of Baikonur without exporting these goods to another territory of the Republic of Kazakhstan, indirect taxes are applied in accordance with the Tax Code of the Russian Federation.".

Article 3

     To supplement the Agreement with Article 12-2 as follows:

     "Article 12-2

     The use of indirect taxes in the performance of works and services

     1. Indirect taxes are levied on the performance of works and services provided in the territory of the city of Baikonur or other territory of the Republic of Kazakhstan, if this territory is recognized as the place of implementation of works and services.

     2. The place of realization of works and services is determined by:

     1) at the location of the immovable property, if the works and services are directly related to the immovable property.

     The provisions of this subparagraph shall also apply to services related to the rental, hiring and provision of immovable property for other purposes.;

     2) at the location of the movable property or vehicle, if the work or services are directly related to the movable property or vehicles located in the relevant territory;

     3) at the place of actual provision of services, if services are provided in the field of culture, art, education, physical culture, tourism, recreation and sports;

     4) at the place of registration with the tax authorities of the buyer of the services, if the following services are provided:

     consulting, legal, accounting, auditing, engineering, advertising, design, marketing, information processing services, as well as research, development and development (technological) work;

     works and services related to the development of programs for electronic computers and databases (computer software and information products), their adaptation and modification, and maintenance of such programs and databases;

     staff services in case the staff works at the buyer's place of business.

     The provisions of this subparagraph shall also apply if:

     transfer, grant, assignment of patents, licenses, and other documents certifying the rights to state-protected industrial property, trademarks, trademarks, trade names, service marks, copyrights, related rights, or other similar rights;

     lease, leasing and provision for use on other grounds of movable property, with the exception of lease, leasing and provision for use on other grounds of vehicles;

     provision of services by a person who engages another person on his own behalf for the main participant in the agreement (contract) or on behalf of the main participant in the agreement (contract) to perform the work and provide the services provided for in this subparagraph;

     5) at the place of registration with the seller's tax authorities, if work is performed (services are provided) not provided for in subparagraphs 1-4 of this paragraph.

     The provisions of this subparagraph shall also apply to the rental, leasing and provision of vehicles for other purposes.

     3. The documents confirming the place of implementation of works and services are:

     1) an agreement (contract) for the performance of works, provision of services;

     2) documents confirming the fact of performance of works, provision of services;

     3) other documents stipulated by the tax legislation of the Parties.

4. If a taxpayer performs or provides several types of work or services, the taxation procedure of which is regulated by this article, and the sale of some work or services is of an auxiliary nature in relation to the sale of other work or services, then the place of sale of ancillary work or services is recognized as the place of sale of the main work or services.

     5. If the territory of the city of Baikonur is recognized as the place of implementation of works and services, then when performing works and services, the tax base, indirect tax rates, the procedure for their collection and tax benefits (exemption from taxation) are determined in accordance with the Tax Code of the Russian Federation.

     If a different territory of the Republic of Kazakhstan is recognized as the place of implementation of works and services, then when performing works and services, the tax base, indirect tax rates, the procedure for their collection and tax benefits (exemption from taxation) are determined in accordance with the Tax Code of the Republic of Kazakhstan.

      6. The application and collection of indirect taxes in the performance of works and services between an individual entrepreneur or a legal entity registered with the tax authority of the city of Baikonur and an individual entrepreneur or a legal entity registered in another territory of the Republic of Kazakhstan, and the mechanism for monitoring their payment are carried out similarly to the procedure established by the Treaty on the Eurasian Economic Union of May 29, 2014.".

Article 4

     This Protocol applies to operations for the sale of goods (performance of works, provision of services) carried out starting from the date of entry into force of this Protocol.

Article 5

     This Protocol shall enter into force on the date of receipt, through diplomatic channels, of the last written notification by the Parties of the completion of the internal procedures necessary for its entry into force, and shall expire on the date of termination of the Agreement.

     Done in Moscow on April 12, 2016, in two copies, each in the Kazakh and Russian languages, both texts being equally authentic.

For the Republic of Kazakhstan

For the Russian Federation

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  

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