Question №1:
What qualifies as international business transactions, and which transactions are subject to control under the Law of the Republic of Kazakhstan "On Transfer Pricing" dated July 5, 2008?
Answer:
According to paragraph 31 of Article 2 of the Law, international business transactions are transactions in which one of the parties is a non-resident not registered in the Republic of Kazakhstan, while the other party is either a resident of the Republic of Kazakhstan or a non-resident conducting business in Kazakhstan through a permanent establishment. Additionally, transactions conducted outside the territory of the Republic of Kazakhstan between residents of Kazakhstan are also considered international business transactions.
Paragraph 1 of Article 3 of the Law establishes that transfer pricing control applies to international business transactions, as well as transactions conducted within the territory of Kazakhstan if they are directly related to international business transactions, including:
Question №2:
Which taxpayers are required to submit transaction monitoring reports under the Law of the Republic of Kazakhstan "On Transfer Pricing" dated July 5, 2008?
Answer:
According to paragraph 2 of Article 6 of the Law on Transfer Pricing, transaction monitoring applies to international business transactions.
Transaction monitoring reports are submitted for international business transactions according to the list approved by the authorized body.
Furthermore, in accordance with paragraphs 2 and 3 of the Rules for Conducting Transaction Monitoring, approved by Order No. 176 of the Minister of Finance of the Republic of Kazakhstan dated March 16, 2015, transaction monitoring is carried out through the observation of prices applied by transaction participants in international business transactions by the state revenue authorities of Kazakhstan.
Participants in transactions conducting international business operations, according to the list of international business transactions for which transaction monitoring reports must be submitted (approved by Order No. 194 of the Minister of Finance of the Republic of Kazakhstan dated March 19, 2015, and registered in the Register of State Registration of Regulatory Legal Acts under No. 10680), and whose total income (expenses) and/or liabilities for the reporting financial year amount to at least 250,000 monthly calculation indices established by the law on the republican budget as of January 1 of the reporting financial year, are required to submit transaction monitoring reports. These include the "Export of Goods (Works, Services)" report, in the form specified in Appendix 1 to these Rules, and the "Import of Goods (Works, Services)" report, in the form specified in Appendix 2 to these Rules. These reports must be submitted to the Committee of State Revenues of the Ministry of Finance of the Republic of Kazakhstan no later than May 15 of the year following the reporting year, in accordance with these Rules. The reporting period is the calendar year.
Question №3:
Which taxpayers are required to submit country-by-country reports to the authorized body?
Answer:
According to paragraph 2 of Article 7-3 of the Law of the Republic of Kazakhstan "On Transfer Pricing" dated July 5, 2008, country-by-country reports must be submitted by the parent company of an international group that is a resident of the Republic of Kazakhstan.
A designated participant of an international group must also submit the country-by-country report if the parent company of the international group has granted this participant the authority to do so.
Question №4:
What are the deadlines for taxpayers to submit a statement of participation in an international group?
Answer:
According to paragraph 1 of Article 5-1 of the Law of the Republic of Kazakhstan "On Transfer Pricing" dated July 5, 2008, a statement of participation in an international group must be submitted by a participant of the international group no later than September 1 of the year following the reporting financial year.