The agreement on the principles of collection of the value added tax during the exporting and commodity import (works, services) between the Government of the Republic of Kazakhstan and the Government of the Kyrgyz Republic

of February 18, 1997

The government of the Republic of Kazakhstan and the Government of the Kyrgyz Republic, the hereinafter referred to as Contracting Parties, aiming at further deepening of integration of economy, creation of equal opportunities for business entities and to establishment of conditions for fair competition, being guided by regulations and rules of international trade,

agreed as follows.

Article 1. General determinations

For the purpose of this agreement:

a) the term "zero rate" means taxation on value added at the rate zero that is provided by the procedure established by the legislation on taxes of Contracting states;

b) the term "principle of destination" means application of zero rate when exporting from customs area of one Contracting Party and taxation when importing on the effective rate established by the national legal system of other Contracting Party;

c) the term "competent authorities" means the Ministries of Finance of Contracting Parties.

Article 2. The principle of collection when exporting

One Contracting Party will assess with the value added tax on zero rate the goods (works, services) exported to other Contracting Party.

The article 3 Principle of Collection when importing

1. The goods imported to one Contracting Party (works, services) which are exported from the territory of other Contracting Party, are assessed with the value added tax in the country of the importer according to its legislation. Collection of the value added tax is performed by customs authorities in case of commodity import on customs area of the Agreeing import Party.

2. The value added tax on imported goods is levied according to the legislation of Contracting States.

Article 4. Solution of matters of argument

All disputes and disagreements between Contracting Parties concerning interpretation and application of provisions of this agreement will be solved by consultations and negotiations of Contracting Parties by Competent authorities.

Article 5. Final provisions

1. This agreement is subject to ratification and becomes effective in day of exchange of instruments of ratification.

2. This agreement is temporarily applied in full from the date of its signing.

3. Each Contracting Party can leave this agreement, having sent the written notice to other Contracting Party not later than six months to exit, having settled the financial and other liabilities which arose during operation of the Agreement.

It is made in the city of Almaty on February 18, 1997 in two authentic copies, everyone in the Kazakh, Kyrgyz and Russian languages, and all texts are equally authoritative.

For the purposes of interpretation of provisions of this agreement the preference is given to the text in Russian.

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