THE ORDER OF THE DEPUTY PRIME MINISTER - THE MINISTER OF FINANCE OF THE REPUBLIC OF KAZAKHSTAN

of April 15, 2022 No. 414

About approval of Rules of the conclusion of the agreement on application of transfer pricing

According to the subitem 6) Item 1 of article 4 of the Law of the Republic of Kazakhstan "About transfer pricing" PRIKAZYVAYU:

1. Approve the enclosed Rules of agreement signature on application of transfer pricing.

2. To provide to committee of state revenues of the Ministry of Finance of the Republic of Kazakhstan in the procedure established by the legislation of the Republic of Kazakhstan:

1) state registration of this order in the Ministry of Justice of the Republic of Kazakhstan;

2) placement of this order on Internet resource of the Ministry of Finance of the Republic of Kazakhstan;

3) within ten working days after state registration of this order in the Ministry of Justice of the Republic of Kazakhstan submission to Department of legal service of the Ministry of Finance of the Republic of Kazakhstan of data on execution of the actions provided by subitems 1) and 2) of this Item.

3. This order becomes effective after ten calendar days after day of its first official publication.

Appendix

to the Order of the Deputy prime minister - the Minister of Finance of the Republic of Kazakhstan of April 15, 2022 No. 414

Rules of the conclusion of the agreement on application of transfer pricing

Chapter 1. General provisions

1. These rules of agreement signature on application of transfer pricing (further – Rules) are developed according to the subitem 6) of Item 1 of article 4 of the Law of the Republic of Kazakhstan "About transfer pricing" (further – the Law) and determine procedure for agreement signature by application of transfer pricing (further – the Agreement) between Committee of state revenues of the Ministry of Finance of the Republic of Kazakhstan (further – Committee) and the participant of the transaction determined by the subitem 16) of article 2 of the Law.

2. The agreement establishes the procedures for determination (calculation) for the prices, method of determination of market price and sources of information on the list of the transactions which are the subject of the agreement and subject to control in case of transfer pricing according to article 3 of the Law provided by the Law.

3. The structure of the Agreement contains the following:

1) general provisions;

2) the determinations used in the Agreement;

3) agreement parties;

4) subject of the agreement;

5) the list of the submitted documents;

6) method of determination of market price;

7) information source applied to determination of the range of market price or the range of market profitability;

8) duration of the agreement;

9) the date of entry into force of the Agreement;

10) the term of provision of information on the applied prices during operation of the Agreement;

11) confidentiality;

12) effects of non-execution (violation) by the participant of the transaction of terms of agreement;

13) bases of early agreement cancelation.

Chapter 2. Procedure for agreement signature on application of transfer pricing

4. The participant of the transaction submits in Committee the application on agreement signature in writing and any form to which the reasons and documents containing the following information are applied:

1) the certificate or the certificate of state registration (re-registration) of the legal entity, constituent documents (the charter, the foundation agreement), statements from the register of shareholders (share), the holding more than 5% shares (shares) or the identity document of physical person;

2) agreements (with amendments and changes) which subject is object of control in case of transfer pricing according to article 3 of the Law;

3) the contract for subsurface use (with amendments and changes) signed with competent authority of the Republic of Kazakhstan and (or) with the Government of the Republic of Kazakhstan, activities for which are connected with implementation of the transactions which are subject of the signed Agreement in case of availability of such contract;

4) information on investments and/or shares, in case of their availability, in the companies of the Republic of Kazakhstan and foreign countries if such investments and/or shares are connected with subject of the transaction in which the Agreement will be signed;

5) data on coherence of the parties, structure of the international group (if the participant of the transaction is participant of the international group), organizational structure of the participant of the transaction if the participant of the transaction does not represent the reporting according to article 7 of the Law in three consecutive years preceding year of filing of application on agreement signature;

6) the financial reporting of the participant of the transaction in three consecutive years preceding year of filing of application on agreement signature;

7) the source of information on market prices used in case of the conclusion of transactions and methodology of forming of market prices of source of information;

8) the method offered for determination of market price, methodology of determination of market price and formula of pricing;

9) the strategy of business including marketing policy (commodity, sales, price, and also policy of promotion of goods in the market), pricing methodology, including information concerning factors which influence price fixation, reputation in the market if the participant of the transaction does not represent the reporting according to article 7 of the Law in three consecutive years preceding year of filing of application on agreement signature.

In case of impossibility of submission of the documents specified in subitems 4), 5), 7), 8) and 9) of this Item, the participant of the transaction represents written reasons about impossibility of their representation. The committee accepts written reasons about impossibility of submission of the specified documents.

5. The committee considers the application of the participant of the transaction on agreement signature within 90 (ninety) working days from the date of obtaining from the participant of the transaction of the specified statement.

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