of December 23, 2004 No. NK-UM-08-5-18/10623
The Tax Committee of the Ministry of Finance of the Republic of Kazakhstan, having considered the letter, reports the following.
According to article 213 of the Code of the Republic of Kazakhstan "About taxes and other obligatory payments in the budget" (Tax code) leviable import are the goods imported or imported on the territory of the Republic of Kazakhstan (except for exempted from the VAT according to article 234 of the Tax Code), which are subject to declaring according to the customs legislation of the Republic of Kazakhstan.
During validity about cooperation in poisko-investigation and mining of hydrocarbons in the Aktyubinsk region of the Republic of Kazakhstan on the terms of the Section of products of February 18, 1992 (further - the Agreement) the branch company (daleekompaniye) was exempted from customs payment and taxes during the importing and commodity exportation, held for use in oil operations.
As appears from the letter, considering that the Company upon termination of validity did not export materials and the equipment in good repair out of limits of the Republic of Kazakhstan, the Department of customs control on the Aktyubinsk region additionally accrues the customs duties and the VAT for import on charged-off fixed assets. Now the Company draws up the customs declaration on the specified fixed assets and the VAT for import is paid.
According to Item 1 of article 235 of the Tax Code in case of determination of tax amount which is subject to budget payment, the receiver of goods has the right to offsetting of VAT amounts, subject to payment for the received goods, including fixed assets if they are used or will be used for the purpose of leviable turnover.
At the time of acquisition of fixed assets the Company had only the turnovers exempted from the VAT i.e. for the purposes of free turnovers.
It is provided by Item 1 to article 239 of the Tax Code that on the goods used for the purposes of free turnovers, the VAT which is subject to payment to suppliers and on import does not belong in offsetting. At the same time the specified VAT belongs on deductions in case of the determination of the taxable income according to the procedure established by the Tax code.
At the same time the tax amount which is not subject to reference in offsetting according to Item 3 of the specified Article belongs on deductions in case of the determination of the taxable income according to the procedure established by the Tax code.
According to Item 1 of article 106 of the Tax Code, the original cost of fixed assets joins costs on their acquisition, production, construction, installation and installation, and also other costs increasing their cost except costs on which the taxpayer has the right to deductions.
Thus, the VAT paid when importing fixed assets and which is not carried in offsetting increases original cost of the specified fixed assets.
Considering that charge and payment of the VAT on the imported fixed assets in your case were made after commissioning of fixed assets, adjustment of the corresponding cost balance of subgroup is made in that tax period in which there was charge of the specified VAT amounts.
Vice-chairman of the Tax Committee of the Ministry of Finance of the Republic of Kazakhstan
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