The excess of the VAT amount is formed as a numerical value according to the declaration, and not in the context of the amounts on invoices.
By the decision of the Astana City Court dated April 3, 2018, the application of JSC "K" to the State Revenue Agency "Department of State Revenue for the West Kazakhstan region of the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan" on the recognition of illegal and cancellation of notification dated August 4, 2017 No. 131 regarding non-confirmation of the refund of excess VAT in the amount of 2,320,904,400 tenge, presented for refund for the period from July 1, 2013 to March 31, 2017. According to the application, the Company appealed the notification regarding non-confirmation of the refund of the excess VAT amount not payable to the budget in the amount of 28 784 951 tenge on invoices received from JSC "B" for the 1st and 2nd quarters of 2016 in the amount of 28 594 295 tenge; branch "Sh" for the 2nd quarter of 2016 in the amount of 190,656 tenge. The Company points out the illegality of the Department's actions in refusing to refund the amount of VAT due to the fact that the specified invoices were not presented by the Company for refund in the request. Thus, the Department unlawfully reduced the amount of VAT on invoices from other suppliers that were stated in the claim.
The Court considered the applicant's conclusions to be erroneous and contrary to the norms of substantive law. In accordance with subparagraph 1) paragraph 1 of Article 272 of the Code of the Republic of Kazakhstan "On Taxes and other mandatory payments to the Budget Tax Code" the excess of the amount of VAT to be refunded from the budget is defined as the excess of the amount of VAT deductible over the amount of accrued tax, accumulated according to the declaration at the end of the reporting tax period. According to paragraph 2 of Article 273 of the Code, if a value-added tax payer has not indicated in the value-added tax return for the tax period a claim for a refund of the excess of value-added tax, then this excess is offset against upcoming value-added tax payments or may be refunded. In this case, the value-added tax payer has the right to refund the excess of value-added tax during the limitation period established by Article 46 of the Code. By virtue of paragraph 52 of the Rules for Tax Reporting (Declaration) on VAT, approved by Order of the Minister of Finance of the Republic of Kazakhstan dated December 25, 2014 No. 587 (hereinafter referred to as the Rules), Appendix 300.011 "Information on the amounts of value-added tax submitted for refund" reflects the amounts of excess VAT submitted for refund in the amount of tax periods.
The information specified in the request for the refund of excess VAT, as well as in the appendix to the declaration "Information on the amounts of VAT submitted for refund" (form 300.11) is the amount of excess VAT submitted for refund in the form of a numerical value. This numerical value is not determined in the context of invoices, since the amount of excess VAT is calculated as a positive difference between the amount of VAT offset over the amount of VAT accrued. In this regard, the excess of the VAT amount is formed as a numerical value according to the declaration, and not in the context of the amounts on invoices. In accordance with Article 635 of the Code, the excess of VAT accumulated on the declaration is subject to refund at the end of the reporting tax period. Therefore, regardless of the period of occurrence of the excess or the amount of excess VAT submitted for refund, the verification of accuracy is carried out with respect to the entire excess amount at the end of the reporting period, as well as the previously untested period within the limitation period.
According to the statement, the Company demanded a refund of VAT on the declaration for the 1st quarter of 2017, therefore, the Department lawfully appointed a tax audit for the cumulative period within the limitation period from January 1, 2013 to March 31, 2017 to verify the validity of the excess VAT claimed for refund. By the resolution of the specialized judicial Board of the Supreme Court dated June 28, 2018, the decision of the court of first instance remained unchanged.
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