Refund of value added tax (VAT) to exporters  

In any financial model, especially for large enterprises, a lot of attention is paid to cash flow, of which VAT refund is a part. According to the legislation of the Republic of Kazakhstan, VAT is returned to exporters who meet certain criteria. At the same time, the guarantee of a refund is the passage of a thematic tax audit of the exporter, which confirms foreign exchange earnings (by second-tier banks), actual exports (by the customs authority), and settlements with suppliers (Pyramid).

Thus, by SCAD Resolution No. 600122-00-6ap/2098 dated March 7, 2023, the following dispute was resolved regarding the claim of Aktobe Copper Company LLP (hereinafter referred to as AMC) to the Department for cancellation of the notification of the results of the tax audit in the part that was not confirmed for refund.

The defendant believed that the presence of violations by the Partnership's counterparties, which are available according to the Pyramid analytical report, leads to non-repayment of the VAT amount. The claim was denied by the decision of the SMAS of May 6, 2022 and the decision of the city court of Appeal of August 18, 2022. In general, there was a position that the plaintiff could apply for a tax refund again.

The plaintiff believed that the tax authority had gone beyond the scope of the thematic audit and, in support of the refusal to refund VAT, charged the Partnership with violations unrelated to transactions for which a VAT refund was claimed, which violates paragraph 12 of Article 152 of the Code "On Taxes and Other Mandatory Payments to the Budget" (hereinafter referred to as the Tax Code).

The plaintiff supported his arguments during the hearing, pointing out that filing a new VAT refund application and conducting a new tax audit would worsen his legal position, as the previously confirmed part of the tax could be denied.

The defendant did not change his position, but indicated that at the time of the appeal to the cassation instance, 14 of the 27 plaintiff's counterparties received responses from authorized bodies, and requested that these materials be attached to the case and taken into account when making a decision.

The SCUD of the Supreme Court annulled judicial acts on the following grounds.

It follows from the act of the documentary tax audit that, according to the Pyramid analytical report, violations were identified for 27 suppliers of the first-level Partnership, who had underestimated the amount of VAT on sales.

According to sub-paragraphs 2) and 3) of paragraph 12 of Article 152 of the Tax Code, no VAT refund is made within the limits of the amounts for which, as of the date of completion of the tax audit:

2) violations have been identified regarding the suppliers of the taxpayer being audited based on the results of the analysis of the Pyramid analytical report;

3) the accuracy of the VAT amounts has not been confirmed.

According to paragraph 11 of the Rules for the refund of excess Value Added tax, approved by the Order of the Minister of Finance of the Republic of Kazakhstan dated March 19, 2018 No. 391 (hereinafter – Rules), when conducting a thematic audit to confirm the accuracy of the amounts of excess VAT submitted for refund, as well as the reliability of the amounts of VAT returned from the budget to the service recipient, in respect of which a simplified refund procedure has been applied, the state revenue authority generates an analytical Pyramid report on suppliers for the inspected service recipient using the information system for the tax period under review.

In accordance with paragraph 12 of the Rules, the tax authority also takes measures:

-) by sending a notification on the elimination of violations identified by the tax authorities based on the results of desk control (hereinafter referred to as the notification), provided for in subparagraph 10) of paragraph 2 of Article 114 of the Tax Code, in order to eliminate violations identified by the results of the analysis of the Pyramid report;

-) by appointment of counter checks of the service recipient's suppliers and (or) suppliers of the supplier (hereinafter referred to as the supplier) in accordance with Article 143 of the Tax Code.

From the above-mentioned provision of the Tax Code and the Rules, the judicial board concludes that for the purposes of VAT refund, it is important that there are no violations in the calculation and payment of VAT by direct suppliers under the transaction with the exporter, in respect of which a refund application has been submitted.

The presence or absence of violations by the supplier of the exporter in transactions with third parties should not affect the provision of the state service "Refund of value added tax from the budget" to the exporter.

Based on the above, the Department's position, expressed verbally in the framework of the cassation appeal and reflected in the Act, that all supplier transactions (second and subsequent levels) should be analyzed, and not just the supplier and exporter transactions directly, is untenable.

Thus, the defendant, indicating in the Verification Report the fact of analyzing the relationship between the plaintiff and his direct suppliers (the first level), actually verifies suppliers of subsequent levels, that is, the fulfillment of obligations of legal entities with which the plaintiff has not concluded a transaction. Thus, the defendant applies the rule of law extensively.

According to subparagraph 2) of paragraph 12 of Article 152 of the Tax Code, no VAT refund is made within the limits of the amounts for which violations were detected by the results of the analysis of the Pyramid analytical report on the date of completion of the tax audit of the suppliers of the taxpayer being audited. At the same time, the specified paragraph also states that the provisions of subparagraph 2) do not apply in case of elimination of violations identified by the results of the Pyramid analytical report by direct suppliers of taxpayers who are entitled to apply a simplified procedure for refunding the amount of excess VAT.

Thus, due to the fact that the parties have different positions on the procedure for conducting an audit, on notifications executed by suppliers, discrepancies in VAT reporting, and the plaintiff is entitled to a simplified VAT refund procedure, the judicial board gives the following legal assessment of the applicable substantive law:

-) the Pyramid report is generated by direct suppliers (that is, the turnover reflection of the person who provided the service (work) to the plaintiff, who delivered the goods within the credited amount of VAT to the plaintiff, is checked;

-) as part of the Pyramid report, according to paragraph 10 of Article 152 of the Tax Code, the DGD must send the notice provided for in subparagraph 10) of paragraph 2 of Article 114 of the Tax Code (desk control) to the plaintiff's direct suppliers. This notification must be sent taking into account the time limits provided for the execution of notifications by the taxpayer in accordance with Article 96 of the Tax Code.;

-) at the time of completion of the inspection, the inspectors must make sure that the notifications have been processed by the direct suppliers. At the same time, the Tax Code does not restrict the defendant in the tools used to verify this fact, nor does it prohibit the re-launch of the Pyramid report.

According to the second part of Article 5 of the CPC, the task of administrative proceedings is the fair, impartial and timely resolution of administrative cases in order to effectively protect and restore violated or disputed rights, freedoms and legitimate interests of individuals, rights and legitimate interests of legal entities in public relations.

Taking into account the fact that the plaintiff in the cassation complaint cites facts on 13 suppliers that eliminated violations as of the date of completion of the audit, the defendant filed a motion to attach materials on 14 suppliers, in order to objectively review the case and based on the tasks of the APPC, the judicial board considered it appropriate to impose on the defendant the obligation to repeat the administrative procedure.

verification of mutual settlements and payment of the corresponding VAT between the plaintiff and his direct suppliers (27 companies) for the disputed period, taking into account the legal position of the court.

At the same time, due to the fact that all other facts and circumstances established as part of the audit and reflected in the Audit Report initiated at the request of the plaintiff are not disputed, the initiation of a new administrative procedure (registration of a new audit) is not required.

Thus, a new decision has been made in this case, and the notification of the results of the tax audit has been canceled. The Court ordered the Department to re-conduct and complete the administrative procedure initiated at the request of the plaintiff, taking into account the legal position of the court.

The specific feature of administrative legal proceedings is the possibility of referring the case for a second administrative procedure.

Similar conclusions were indicated in Resolution No. 6001-22-00-6ap/1172 of December 8, 2022, which also resolved the issue of VAT refund.

Thus, the inspectors had no questions about the reliability of VAT amounts. The documents confirming the transactions were analyzed during the tax audit, including: invoices, payment documents, account cards, accounting registers, contracts, contracts, VAT declarations, customs declarations, waybills, import statements, air waybills - that is, evidence confirming the fact of the transaction. transactions, movement of goods.

The DGD and local courts refer to the verdict of the Turksib District Court of Almaty dated 03/29/2021 in respect of S.V. Zmeikov (hereinafter referred to as the verdict), indicating that S.S. Lukashov (the plaintiff's owner) gave a power of attorney to S.V. Zmeikov and was not engaged in his company.

However, there is an effective decision of the Council of Economic and Social Council of Almaty dated 09/10/2019, according to which the claim of the UGD of the Medeu district of Almaty against AsiaAeroSnab LLP on the recognition of state registration as invalid was refused. After a subsequent appeal, this decision remained unchanged and entered into force.

Thus, the refusal to confirm the VAT refund is due only to the verdict. The export is confirmed by the data of the customs authority, banks and primary documentation, as reflected in the Inspection Report.

Accordingly, in this part, the plaintiff's argument is well-founded.

The Tax Code establishes specific grounds for refusing a refund. At the same time, these grounds do not have the grounds specified in the inspection report by the inspectors.

The plaintiff's argument is justified on the following grounds:

The plaintiff's registration is valid. Accordingly, he has the legal capacity to file a claim for a VAT refund.,

Earlier, the plaintiff claimed a VAT refund for the 4th quarter of 2017, where part of the amount was confirmed for refund. Accordingly, the fact of the invalidity of the plaintiff's registration was not questioned.,

After the entry into force of the verdict on the attempted smuggling by S.V. Zmeikov, the tax authority did not file lawsuits to invalidate the registration or transactions of the plaintiff. Accordingly, there are no judicial acts confirming this fact.

The plaintiff did not claim any VAT refunds that could have been related to the smuggling attempt.

Thus, the reference of the DGD and local courts to the verdict against S.V. Zmeikov is not a reason for refusing to refund VAT if there is a fact of export confirmed by the customs authorities and receiving foreign exchange earnings, which follows from the data of the banks.

Based on the above, the judicial board believes that the plaintiff has the right to receive a VAT refund for the stated period, taking into account the statute of limitations, which did not expire at the time of filing the application.

At the same time, the DGA should calculate the exact amount to be refunded, taking into account the literal fulfillment of the requirements of the Tax Code and the legal position of the court.

Thus, upon completion of the plaintiff's tax audit, the defendant cannot refuse the taxpayer due to the expiration of the statute of limitations, since the initial request for a refund was submitted on time.

In the following dispute, the tax authority considered that the taxpayer had failed to confirm his export. However, the courts did not agree with this position. So, in the resolution of the SCAD of the Armed Forces No. 6001-22-006ap/1775 dated April 4, 2023, the dispute between Zhaikmunai LLP and the Department on recognition as illegal and cancellation of notification of the results of the audit was considered.

The claim was satisfied by the decision of the SMAS of Astana dated March 30, 2022 and the decision of the SCAD Court of Astana dated July 12, 2022. The notification of the results of the audit regarding the refusal to refund VAT due to non-confirmation of exports to the territory of the member States of the Eurasian Economic Union was declared illegal and canceled.

It follows from the case file that the Department conducted a thematic tax audit of the Partnership on the correctness of the calculation and timely payment of VAT, as well as confirmation of the accuracy of the VAT amounts submitted for refund. The claim challenges the notification regarding the refusal to confirm the refund of the VAT amount due to non-confirmation of the export of petroleum products to the territory of the EAEU member States.

In accordance with paragraph 1 of Article 446 of the Tax Code, when exporting goods from the territory of the Republic of Kazakhstan to the territory of another EAEU member State, a zero VAT rate is applied. According to paragraph 5 of Article 152 of the Tax Code, in the case of such exports, information from the documents specified in Article 447 of the Tax Code is taken into account, that is:

1) agreements (contracts);

2) an application for the import of goods and payment of indirect taxes with a note from the tax authority of the EAEU member state into whose territory the goods were imported, for payment of indirect taxes and (or) exemption and (or) other method of payment, or a list of applications;

3) copies of shipping documents confirming the movement of goods from the territory of one EAEU Member State to the territory of another EAEU Member State.

During the tax audit, the plaintiff submitted:

1) contracts for the export of liquefied petroleum gas with customers from the Republic of Belarus; the Russian Federation; the Kyrgyz Republic;

2) applications for the import of goods and payment of indirect taxes with the stamp of the tax authorities of the Republic of Belarus, the Russian Federation and the Kyrgyz Republic, on whose territory the goods were imported;

3) duplicates of railway waybills (for the sender) confirming the movement of goods from the territory of the Republic of Kazakhstan to the territory of the EAEU member State.

The basis for the refusal to confirm the refund of the VAT amount, the tax authority indicates the failure to present the railway consignment note with the imprints of the carrier's calendar stamp at the destination station in column 27 "Date of arrival" (Article 8 "Explanations on filling out the consignment note" of the Agreement on International Railway Freight Traffic).

According to the tax authority, a duplicate bill of lading without a mark at the destination station cannot be considered as a shipping document confirming the movement of goods from the territory of the Republic of Kazakhstan to the territory of another EAEU member state.

In accordance with paragraph 7 of section 2 of the Agreement on International Rail Freight Traffic, a duplicate consignment note is issued to the sender after the conclusion of the contract of carriage. The original bill of lading and the cargo arrival notification sheet accompany the cargo to the destination station and are with the recipient of the cargo, and the travel document is with the carrier.

Therefore, a duplicate bill of lading intended for the sender cannot contain an impression of the carrier's calendar stamp, since it does not accompany the cargo to the destination station.

At the same time, the case file contains documents confirming the movement of goods across the territory of the EEA: copies of the originals of railway bills of lading, travel documents and notifications of arrival of goods in the Russian Federation, Belarus and Kyrgyzstan with imprints of the calendar stamp of carriers at the destination station. It follows from the explanations of the plaintiff's representative that these documents were requested by the plaintiff from the buyers for submission to the court, since the duplicate invoices were not taken into account by the tax authorities.

In order to ensure the completeness and reliability of the documents submitted by the plaintiff, the court of first instance instructed the defendant, in accordance with Chapter 49 of the EAEU Customs Code, to request information from the customs authorities of the Russian Federation, the Republic of Belarus and the Kyrgyz Republic confirming the export of liquefied petroleum gas (propane butane mixture) to the customs territory of the EAEU member States, the buyers of which are the companies listed in the annex to the request.

At the request of the court, the state services of these states confirmed the supply of gas by the plaintiff in the period 2019-2020.

By resolving the dispute and satisfying the claim, the local courts came to the correct conclusion that the plaintiff had confirmed the export of goods (liquefied natural gas) to the territory of the EAEU member states by submitting reliable evidence to the court, which served as the basis for recognizing as unlawful the conclusions of the audit report on the refusal to confirm the refund of VAT.

Thus, the courts decided on the illegality of the conclusions of the inspection report and the notification of refusal to confirm the amount of VAT to be refunded. At the same time, the tax authority is not obligated to refund the specified amount of excess VAT, since the procedure for refunding the amount of excess VAT to the taxpayer from the personal account is subject to implementation in accordance with Chapter 49 of the Tax Code, taking into account the conclusions of the audit report and notification in the non-disputed part.

 According to subparagraph 4) of paragraph 2 of Article 19 of the Tax Code, tax authorities are obliged, within their competence, to provide explanations and comments on the occurrence, fulfillment and termination of a tax obligation. Such clarifications and comments, as well as methodological recommendations, including those of the authorized body, do not apply to regulatory legal acts. They are subject to assessment by the court, taking into account their compliance with the norms of tax legislation....

...Tax policy (a set of measures to establish new and cancel existing taxes and payments to the budget, change rates, objects of taxation and objects related to taxation, the tax base for taxes and payments to the budget) is carried out by the authorized body in the field of tax policy…

...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 (paragraph 5 of Article 2 of the Tax Code). In accordance with paragraph 3 of Article 4 of the Constitution, the procedure and conditions of operation in the territory of the Republic of Kazakhstan of international treaties to which Kazakhstan is a party are determined by the legislation of the Republic of Kazakhstan.…

...If an internationally ratified treaty grants the right of taxation to the Government of the Republic of Kazakhstan, but this right is not implemented in national legislation (there is a benefit), then national legislation is subject to application.…

...When interpreting conventions for the avoidance of double taxation, the general rules of interpretation provided for by international treaties and the legislation of the Republic of Kazakhstan apply, if such rules of interpretation comply with the provisions of the Vienna Convention on the Law of Treaties, to which the Republic of Kazakhstan acceded on the basis of a Resolution of the Supreme Council.

Resolution of the issue of tax control in the event of satisfaction of a claim for liquidation (invalidation of registration (re-registration) of a legal entity is within the authority of the tax authority, and only when taking measures provided for by tax legislation may the rights and legitimate interests of counterparties be affected, who are entitled to protect their rights and legitimate interests in challenging decisions, actions (inaction) of the tax authorities…

13. Explain to the courts that, according to subparagraph 3) of paragraph 2 of Article 49 of the Civil Code, the courts may decide to liquidate a legal entity in the absence of a legal entity at its location or actual address, as well as founders (participants) and officials, without whom the legal entity cannot function for one year.

The absence of the above-mentioned features in combination is the basis for refusing to satisfy the plaintiff's claim, since there are other ways to respond by the tax authorities.…

…The state re-registration of a legal entity is an administrative act of the registering authority, and therefore a claim for invalidation of such re-registration is subject to consideration in administrative proceedings.…

...Courts should take into account that from January 1, 2020, participants in tax legal relations, when performing actions in the current tax period in relation to previous tax periods, are not entitled to apply the expired five-year statute of limitations of the Tax Code, since such a period under the current Tax Code is three years, unless otherwise provided by the Tax Code.

The tax authorities are not entitled to make claims to the taxpayer and/or tax agent beyond the limitation period. At the same time, the Tax Code does not limit the calculation of penalties to the limitation periods.…

...The total limitation period, taking into account its suspension during the transfer pricing tax audit, may not exceed seven years.

When suspending an audit on these issues, the tax authority must comply with the requirements of Article 8 of the Law of the Republic of Kazakhstan dated July 5, 2008.

No. 67-IV "On transfer pricing". The limitation period may be suspended when sending a request that must comply with the following requirements:

it is addressed to the competent authority (organization) of the State;

be personalized, compiled in relation to the taxpayer being audited;

submitted on issues included in the subject of verification.

Courts should take into account that in case of non-compliance of the request with the above requirements, such a request is not considered to have been sent.…

...For tax claims for the payment of taxes and other payments to the budget, calculated, accrued by state revenue authorities and submitted to taxpayers for payment within the limitation period, the expiration of the limitation period does not terminate the tax obligation that has arisen and does not release the taxpayer from its fulfillment…

It is necessary to separate the right of the tax authority to calculate or revise the calculated, accrued amount of taxes and other mandatory payments to the budget and the taxpayer's right to demand a set-off and (or) refund of taxes and payments to the budget, penalties. Thus, when exercising a taxpayer's right to refund taxes from the budget, the tax authority does not calculate or review the calculated amount of taxes, but confirms or refuses to confirm the refund of taxes from the budget.

In this regard, with regard to the right of taxpayers to demand a set-off and (or) refund of taxes and payments to the budget, penalties, when calculating the limitation period, the date of receipt (registration) by the tax authority of the tax application provided for in subparagraph

1) paragraph 4 of Article 101 of the Tax Code, or the requirement to refund the amount of excess VAT provided for in subparagraph 2) paragraph 1 of Article 431 of the Tax Code, and not the date of the decision on the results of the tax audit, including notification of the results of the tax audit…

...If the state fee is paid by the plaintiff for an incorrect budget classification code or not in full, then in accordance with part four of Article 138 of the Administrative Procedural Procedure Code of the Republic of Kazakhstan (hereinafter referred to as the APPC), the judge indicates these shortcomings to the plaintiff and sets a deadline for their correction.…

...The submission by a taxpayer, within the time period established by the Tax Code, of an explanation on the violations identified not specified in paragraph 3 of Article 96 of the Tax Code and corresponding to the requirements of subparagraph 2) of paragraph 2 of Article 96 of the Tax Code, is recognized as the fulfillment of a notification on the elimination of violations identified by the tax authorities based on the results of desk control, and does not require verification of their validity. the creature.

23. By virtue of the second part of Article 135 of the CPC (claim for recognition), the plaintiff may also demand that an onerous administrative act that is no longer legally binding be declared illegal, therefore, claims challenging the executed notification based on the results of desk control are subject to court review.

A claim to challenge the notification based on the results of desk control is subject to consideration in administrative proceedings.

When considering claims challenging notices of elimination of violations provided for in subparagraphs 2) and 3) of paragraph 3 of Article 96 of the Tax Code, identified by the tax authorities based on the results of desk control, the court is obliged to evaluate and examine the evidence provided by the taxpayer to confirm the actual receipt of goods, works, services from a legal entity and (or) an individual an entrepreneur whose registration (re-registration) has been declared invalid by a court decision that has entered into force in accordance with paragraph 5 of Article 96 of the Tax Code.

In all other cases, it is sufficient for the court to determine whether the tax authority had the legally prescribed grounds for issuing a notification without verifying the validity of its claims on the merits. Otherwise, the results of future tax audits will be predetermined, including an unscheduled thematic audit on the issue of non-compliance with the notification based on the results of desk control.

The tax authority has the right to make a decision on recognizing the notification as unfulfilled, including in cases where:

The explanation is not subject to submission by the taxpayer (paragraph 3 of Article 96 of the Tax Code) and violations have not been eliminated.;

the deadline set by the Tax Code for submitting an explanation or filing a complaint against the notification based on the results of desk control has been missed and violations have not been eliminated.;

By a court decision that has entered into legal force, the taxpayer has been denied a claim for recognition of the notice issued in accordance with paragraph 3 of Article 96 of the Tax Code as illegal, and the violations have not been eliminated.

A complaint (claim) against the decision to declare a notification unfulfilled may be filed by a taxpayer within ten working days from the date of its delivery (receipt) to a higher tax authority and (or) an authorized body or court.

The taxpayer has the right to choose the body to which a complaint (claim) can be filed.…

...It should be borne in mind that, by virtue of paragraph 3 of Article 117 of the Tax Code, no penalty is charged on the amount of arrears in property tax, land tax and vehicle tax from individuals resulting from the revision by the tax authorities of the calculated amounts of taxes after the due date for the relevant tax period…

...28. At all stages of the plaintiffs' appeal against the actions and acts of the tax authorities, the court should consider the possibilities of reconciling the parties and resolving the dispute by the tax authority independently (for example, making changes to information systems in the presence of technical errors, indicating the status "executed" for desk control notifications, and so on) in cases of administrative discretion…

...In accordance with part six of Article 98 of the CPC, filing a complaint to the detriment of the applicant is not allowed. Since a thematic audit in accordance with Article 186 of the Tax Code is appointed during the consideration of a taxpayer's (tax agent's) complaint, the authorized body cannot decide on the calculation of additional amounts of taxes, other mandatory payments to the budget, or penalties not accrued in the disputed notification based on the results of the audit.

The decision of a higher authority (authorized body), adopted based on the results of consideration of a complaint against notification of the results of a tax audit, cannot be the subject of judicial challenge, as it does not entail legal consequences. If the notification of the results of the tax audit remains unchanged, the said notification may be challenged in court, and if it is canceled, the notification of the results of consideration of the complaint against the notification of the audit results may be challenged.

30. According to Article 148 of the Tax Code, an order is the basis for conducting a tax audit.

As an act on the appointment of an audit, the order may be the subject of judicial challenge, since it is issued within the framework of the exercise of authority by the tax authority and entails legal consequences for the taxpayer (tax agent).…

...Unscheduled inspections may not be appointed and conducted in the absence of the grounds listed in paragraph 3 of Article 145 of the Tax Code and paragraph 3 of Article 144 of the Entrepreneurial Code. Such inspections are subject to invalidation, and the acts on their appointment are illegal and canceled on the basis of paragraph 1 and subparagraph 1) of paragraph 2 of Article 156 of the Business Code, as issued in the absence of grounds for conducting an inspection.

31. Based on the provisions of Article 159 of the Tax Code, which states that the decision based on the results of a tax audit is a notification issued by a tax authority on the results of a tax audit, in case the taxpayer (tax agent) does not agree with the accrued amounts of taxes and other mandatory payments to the budget, obligations to calculate, withhold, transfer mandatory pension contributions, mandatory professional pension contributions, calculation and payment of social contributions and (or) contributions to compulsory social health insurance and penalties, reduction of losses, If the amounts of excess VAT and (or) corporate (individual) income tax withheld from the source of payment from non-resident income are not eligible for refund, only the notification is subject to judicial review. The court verifies the legality of the calculation of the disputed amounts, taking into account the conclusions set out in the tax audit report.

A tax audit report may be challenged if the taxpayer does not agree with its conclusions, which did not entail the above consequences, but which affect his rights and obligations, including in future tax periods. An appeal against an inspection report is carried out in accordance with the procedure provided for by the legislation of the Republic of Kazakhstan for appealing actions of tax officials.

The execution of the notification of the results of the tax audit does not deprive the taxpayer of the right to appeal the executed notification in the manner and within the time limits provided for by the Tax Code.

The content of the tax audit report must comply with the requirements of paragraph 1 of Article 158 of the Tax Code. The conclusions of the tax authority on violations of the tax and other legislation of the Republic of Kazakhstan committed by a taxpayer (tax agent) are subject to presentation with reference to the legislation, substantiating the arguments and disclosing the circumstances indicating violations.

According to the third part of Article 129 of the CPC, when considering a claim to appeal the results of a tax audit, a tax authority may refer only to conclusions and justifications indicating a violation by a taxpayer of tax and other legislation, which is reflected in the tax audit report.…

...32. According to the principle of certainty of taxation, established by Article 6 of the Tax Code, taxes and payments to the budget of the Republic of Kazakhstan must be certain.

Certainty of taxation means the establishment in the tax legislation of the Republic of Kazakhstan of all the grounds and procedure for the occurrence, fulfillment and termination of a taxpayer's tax obligation, the duty of a tax agent to calculate, withhold and transfer taxes…

...The duty to prove the circumstances that served as the basis for the adoption of the disputed act by the tax authority is assigned to the tax authority…

...Taking into account the provisions of Article 128 of the CPC, the tax authority is required to submit evidence to the court of the illegality of the taxpayer's tax benefit.

35. When challenging a taxpayer's notification of the results of a tax audit or an audit report on the grounds of violations by the tax authority of the procedure and deadlines for conducting tax audits established by paragraph 2 of Chapter 18 of the Tax Code, the court should proceed from an assessment of the nature of the violations and their impact on the legality and validity of the audit results. In particular, the results of an audit conducted without an order, which, according to Article 148 of the Tax Code, is the basis for conducting a tax audit, or on the basis of an order that is subsequently recognized as illegal, are subject to recognition as illegal.

Similar consequences occur if, in violation of paragraph 1 of Article 146 of the Business Code, an order for conducting a tax audit, with the exception of a counter audit, has not been registered with the authorized body in the field of legal statistics and special accounting.

Abbreviations

APPC – Administrative Procedural Code

CPC – Code of Civil Procedure

Tax Code – The Code "On Taxes and Other Mandatory Payments to the Budget"

DGD, Department – Department of Public Services

UGD, Management – State Revenue Department

CC – The Criminal Code

CPC – Code of Criminal Procedure

CPN – corporate income tax

VAT -- value added tax

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