ORDER OF THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN

of April 12, 2018 No. 184

About approval of Rules (technique) of pricing when implementing export transactions with the sulfur received as share of the Republic of Kazakhstan under the Production sharing agreement across the Northern Caspian Sea of November 18, 1997

According to the subitem 3) of Item 10 of article 10 of the Law of the Republic of Kazakhstan of July 5, 2008 "About transfer pricing" the Government of the Republic of Kazakhstan DECIDES:

1. Approve the enclosed Rules (technique) of pricing when implementing export transactions with the sulfur received as share of the Republic of Kazakhstan under the Production sharing agreement across the Northern Caspian Sea of November 18, 1997.

2. This resolution becomes effective from the date of its signing.

Approved by the Order of the Government of the Republic of Kazakhstan of April 12, 2018 No. 184

Governed (technique) of pricing when implementing export transactions with the sulfur received as share of the Republic of Kazakhstan under the Production sharing agreement across the Northern Caspian Sea of November 18, 1997

Chapter 1. General provisions

1. These rules (technique) of pricing when implementing export transactions with the sulfur received as share of the Republic of Kazakhstan under the Production sharing agreement across the Northern Caspian Sea of November 18, 1997 (further – Rules) are developed according to the subitem 3) of Item 10 of article 10 of the Law of the Republic of Kazakhstan of July 5, 2008 "About transfer pricing" (further – the Law) and establish procedure for determination (calculation) for the prices when implementing export transactions with the sulfur received as share of the Republic of Kazakhstan under the Production sharing agreement across the Northern Caspian Sea of November 18, 1997 (further – the Agreement).

2. In these rules the following terms, determinations and abbreviations are used:

1) information source – Argus FMB of Seurat (Argus Media Limited, Great Britain);

2) differential – the amount of adjustment applied to reduction in comparable economic conditions of transaction price or the price from information source;

3) the contract – the purchase and sale agreement of goods;

4) the quotation on sulfur – the price quotation published in information source;

5) transaction price (realization) – the goods price for one unit of measure according to the contract expressed in contract currency and calculated according to provisions of these rules;

6) the receiver on behalf of the state – the legal entity determined by the Government of the Republic of Kazakhstan, acting on behalf of the state as the receiver of the minerals transferred in natural form by the subsoil user on account of execution of the tax liability provided by the tax legislation of the Republic of Kazakhstan and (or) agreements (contracts) on the Section of products, the contract for subsurface use approved by the President of the Republic of Kazakhstan, stipulated in Article 722 Codes of the Republic of Kazakhstan of December 25, 2017 "About taxes and other obligatory payments in the budget" (Tax code);

7) margin of the buyer – the size of the allowance of the buyer to the price for 1 (one) metric ton of sulfur determined following the results of the held tender for the choice of the buyer of sulfur;

8) goods – the commodity sulfur transferred by the taxpayer and received by the receiver on behalf of the state within transfer of minerals on account of execution of the tax liability on payment in natural form of share of the Republic of Kazakhstan under the Agreement;

9) FCA or EXW – bases of delivery according to the Incoterms 2010;

10) Rail-Tariff – system of the automated calculation of cargo rate by rail;

11) SWIFT message – the international interbank system of information transfer and making payments.

Chapter 2. Procedure for determination of transaction price (realization) on sulfur

3. By supply of sulfur on delivery conditions of the FCA or EXW station Karabatan with further realization from port of the Baltic Sea (Ust-Luga port) transaction price (realization) is calculated by the following formula:

P = B – D – M

where:

P – transaction price (realization) on sulfur;

B – arithmetic average value of the quotations on sulfur under the contract for 1 (one) metric ton published in information source for the last four weeks preceding shipping date, applied in accordance with the terms of the contract.

Quotations in this direction are published in information source using one of the following quotations:

CFR Mediterranean Sea;

CFR North Africa;

CFR Brazil.

The choice of the quotation is performed depending on the direction of export.

D – the differential including the following expenses:

lease of cars (gondola cars);

the cost of railway cargo transportation, cargo departure loaded and cargo receipt of empty cars (gondola cars), giving cleaning of cars (gondola cars) to loading and unloading points, services in sediment storage of loaded cars (gondola cars) in sidings;

customs clearance;

forwarding by rail;

tracking of cars (gondola cars);

sealing and drawing stickers;

shunting works at stations of loading and (or) shipment;

station works at stations of loading and (or) shipment;

wagon demurrages (gondola cars);

storage of sulfur in ports;

harbor fees;

insurance;

inspection of load;

sulfur moistening;

banking expenses on opening and servicing of the irrevocable letter of credit;

utilization of envelopes;

delivery costs;

transfer in ports;

demurrage (simple) vessels.

M – margin of the buyer.

4. By supply of sulfur on delivery conditions of the FCA or EXW station Karabatan with further realization from the ports of the Black Sea (ports Caucasus, Novorossiysk, Ilyichevsk) transaction price (realization) is calculated by the following formula:

P = B – D – M

where:

P – transaction price (realization) on sulfur;

B – arithmetic average value of the quotations on sulfur under the contract for 1 (one) metric ton published in information source for the last four weeks preceding shipping date, applied in accordance with the terms of the contract.

Quotations in this direction are published in information source using one of the following quotations:

CFR Mediterranean Sea;

CFR North Africa;

CFR Brazil.

The choice of the quotation is performed depending on the direction of export.

D – the differential including the following expenses:

lease of cars (gondola cars);

Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info