Registration as a VAT payer
One of the forms of state control, according to subparagraph 1) of paragraph 4 of Article 69 "Tax control" of the Tax Code, is the registration of taxpayers with tax authorities.
At the same time, registration as a VAT payer is conditional for VAT purposes. Thus, registration is mandatory when the turnover threshold of 30,000 MCI is reached.
In Resolution No. 6001-22-00-6ap/245 dated April 21, 2022, the SCAD evaluates this issue.
For the first half of 2018, the Fermastat Partnership provided tax reports in the TNF form 910.00, according to which the turnover amounted to 57,724,050 tenge. For the second half of 2018, tax reporting was provided in the TNF form 910.00, where the turnover amounted to 56,973,696 tenge. The total taxable turnover for 2018 amounted to 114,697,746 tenge.
On May 19, 2021, the Management issued a notice to the Partnership on the elimination of violations of the tax legislation of the Republic of Kazakhstan, which indicated the need to register for VAT.
By the decision of the DGD of the Mangystau region, the complaint of the Partnership against the disputed notification was left without satisfaction.
In rejecting the claim, the courts of the first and appellate instances proceeded from the fact that the contested notification complies with the requirements of paragraph 7 of Article 82 and does not contradict the requirements of Articles 94, 96 of the Tax Code, as well as the procedure for issuing a notification on the elimination of violations of the tax legislation of the Republic of Kazakhstan, the content of the notification complies with the requirements of Articles 114, 115 of the Tax Code.
These conclusions of the courts of first instance and appeal are reasonable, they comply with the norms of tax legislation.
Paragraphs 1, 2 and 4 of Article 82 of the Tax Code provide that, in particular, resident legal entities are subject to mandatory VAT registration.
If the amount of turnover for the purposes of VAT registration exceeds the minimum turnover during a calendar year, the persons subject to VAT registration specified in paragraph 1 of this Article are required to submit a tax application for VAT registration to the tax authority at their location.
The minimum turnover is 30,000 times the monthly calculation index established by the law on the republican budget and effective on January 1 of the corresponding fiscal year.
In accordance with paragraph 7 of Article 82 of the Tax Code, if a person specified in paragraph 1 of this Article is identified who has not submitted a tax application for VAT registration, in accordance with the procedure specified in paragraph 2 of this Article, the tax authority shall send him a notification on the elimination of tax violations no later than five working days from the moment of identification of such a taxpayer. the legislation of the Republic of Kazakhstan in accordance with the procedure established by Article 115 of this Code.
In this case, the violation was revealed during the analysis by the Department, which instructed the Department to issue notifications regarding the legal entities listed in the appendix and provide information by May 17, 2021.
After that, on May 19, 2021, the Office formed and sent a notification regarding the Partnership on the elimination of violations of tax legislation, since, according to the submitted declarations, the plaintiff's turnover for 2018 exceeded the minimum turnover established by the Tax Code in the amount of 30,000 times the monthly calculation index.
It can be seen from the content of this notification that it was issued on the basis of subparagraph 12) of paragraph 2 of Article 114 of the Tax Code, that is, on the elimination of violations of the tax legislation of the Republic of Kazakhstan.
The plaintiff's arguments that the Office issued a notification based on the results of desk control do not deserve attention, since there is not sufficient data in the case file indicating that the tax authority conducted desk control.
It was established that the fact of violation of tax legislation by the Partnership was revealed by the Department, which instructed the Department to issue a notification to the Partnership, therefore there was no need for desk control.
It should also be noted that submitting an application for VAT registration is the responsibility of the Partnership, which does not deny the fact that the turnover for 2018 exceeded 30,000 times the monthly calculation index.
From the explanations of the representative of the Partnership, M.S. Asauova, given at the court session of the cassation board, it can be seen that the Partnership, without denying the fact that the turnover in 2018 exceeded 30,000 times the monthly calculation index, has not yet submitted an application to the tax authority for VAT registration.
The above indicates that the Partnership has not fulfilled its tax obligation provided for in Article 82 of the Tax Code for a long time, although it has been duly notified of this and the fact of violation of tax legislation is not denied by it.
According to paragraphs 4 and 5 of Article 8 of the Civil Code of the Republic of Kazakhstan (CC), citizens and legal entities must act in good faith, reasonably and fairly in exercising their rights, observing the requirements contained in the legislation and the moral principles of society. Actions of citizens and legal entities aimed at harming another person, abusing the right in other forms, as well as exercising the right in contradiction with its purpose are not allowed. In case of non-compliance with these requirements, the court may refuse to protect the person's right.
In this case, the court of cassation sees an abuse of law in the actions of the Partnership, since the Partnership has not fulfilled its tax obligation for a long time to submit an application to the tax authority for VAT registration, although it has been duly notified of this and the fact of violation of tax legislation is not denied by it.
It should be noted that the Partnership initiated an administrative claim in this case on the basis of incorrect instructions in the letters of the Department and the Office to conduct desk control in relation to it, although the disputed notification was issued on the basis of subparagraph 12) of paragraph 2 of Article 114 of the Tax Code.
In such circumstances, there is no reason to satisfy the cassation appeal, and the judicial acts issued in the case must be upheld.
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