Article 10. Concepts related to subsurface use of the Tax Code of the Republic of Kazakhstan

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Concepts related to subsurface use:

1) a subsurface use contract is an agreement between a competent authority or an authorized body for the study of subsurface resources or a local executive body of a region, city of republican significance, capital in accordance with the competence established by the legislation of the Republic of Kazakhstan on subsurface resources and subsurface use, and an individual and (or) a legal entity for exploration, production, combined exploration and mining or the construction and (or) operation of underground structures not related to exploration and (or) production, or for the state geological study of the subsurface.

The subsurface use contract also includes licenses for subsurface use and other types of granting the right to subsurface use and (or) water use in accordance with the legislation of the Republic of Kazakhstan.

At the same time, the terms "exploration contract", "production contract", "combined exploration and production contract" and "exploration or production license" used in this Code are identical to the concept of "subsurface use contract", the term "exploration and production contract" is identical to the concept of "combined exploration contract and the loot";

2) subsurface users are natural or legal persons who have the right to conduct subsurface use operations, including oil operations, and (or) water use on the territory of the Republic of Kazakhstan in accordance with the laws of the Republic of Kazakhstan.

At the same time:

Subsurface use operations are recognized as works related to the geological study of the subsurface, exploration and (or) extraction of minerals, including those related to the exploration and extraction of groundwater, therapeutic mud, exploration of the subsurface for wastewater discharge, as well as the construction and (or) operation of underground structures not related to exploration and (or) prey;

oil operations are recognized as work on exploration, production of hydrocarbons, construction and (or) operation of necessary technological and production facilities.;

3) non–contractual activity - the activity of a subsurface user that is not directly provided for by the provisions of the subsurface use contract, any other activity;

4) contractual activity – the activity of a subsurface user carried out in accordance with the provisions of the subsurface use contract;

5) preparation of hydrocarbons – a complex of technological processes for the preparation of hydrocarbons, including collection, delivery for preparation, flow of borehole fluid into measuring units, degassing, dewatering, desalination, stabilization, demercaptanization;

6) recipient on behalf of the state – a legal entity designated by the Government of the Republic of Kazakhstan acting on behalf of the state as a recipient of minerals transferred in kind by a subsurface user to fulfill a tax obligation provided for by the tax legislation of the Republic of Kazakhstan and (or) production sharing agreements (contracts), a subsurface use contract approved by the President of the Republic Kazakhstan, provided for in Article 755 of this Code;

7) mineral raw materials – a part of the subsurface extracted to the surface (rock, ore raw materials, etc.) containing a mineral (minerals), excluding dilution;

8) primary processing (enrichment) of mineral raw materials is a type of mining activity that:

It includes on-site collection, crushing or crushing, classification (sorting), briquetting, agglomeration and enrichment by physico-chemical methods (without qualitative changes in the mineral forms of minerals, their aggregate phase state, and crystal chemical structure);

It may include processing technologies that are special types of mining operations (underground gasification and smelting, chemical and bacterial leaching, drainage and hydraulic mining of placer deposits);

9) operator is a legal entity created or defined in accordance with the laws of the Republic of Kazakhstan by subsurface users engaged in subsurface use operations as part of a simple partnership (consortium) under a production sharing agreement (contract).;

10) mining – the whole range of works (operations) directly related to the extraction of hydrocarbons, mineral raw materials or solid minerals from the subsurface to the surface and (or) the separation of minerals from their places of occurrence, including from man-made mineral formations, as well as related to groundwater abstraction;

11) minerals – natural mineral formations, hydrocarbons and groundwater contained in the subsurface, as well as natural mineral formations and organic substances containing useful components, the chemical composition and physical properties of which allow them to be used in the field of material production and (or) consumption, and (or) other needs directly or after processing.

The Code of the Republic of Kazakhstan dated July 18, 2025 No. 214-VIII SAM.

President

Republic of Kazakhstan

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From January 1, 2026, to invalidate the Code of the Republic of Kazakhstan dated December 25, 2017 "On Taxes and Other Mandatory payments to the Budget" (Tax Code) in connection with the entry into force of the Tax Code dated July 18, 2025 No. 214-VIII SAM.

Article 10. The principle of transparency of the tax legislation of the Republic of Kazakhstan, the Code on Taxes and Other Mandatory Payments to the Budget (Tax Code) of the Republic of Kazakhstan

Regulatory legal acts regulating taxation issues are subject to mandatory official publication.

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