of September 8, 2010 No. HK13-21/10512
Association of taxpayers of Kazakhstan
Almaty, Ulitsa Auezova, 84
office 311, 3rd floor
The Tax Committee of the Ministry of Finance of the Republic of Kazakhstan, having considered your letter of 22.06.2010 No. 356-06/10 (further - the Letter), reports the following.
On the first question.
Follows from the letter that the nonresident Company performing the activities through representation in the Republic of Kazakhstan (RK) grants loans to the legal resident person RK on the terms of the paid nature, that is the resident shall pay remuneration for use of loan money. Loans are granted by separate tranches monthly, since 2004.
The receiver of loan - the resident of RK who is the subsoil user according to the Contract for subsurface use has stability of tax regime which remained in force till January 1, 2009.
If the condition of stability of tax regime, according to the Contract for subsurface use, extends to the value added tax (VAT), that calculation and payment of the VAT shall be performed according to the tax legislation existing at the time of the conclusion of the Contract for subsurface use. According to the Letter, the existing tax legislation, according to the Contract for subsurface use, was the Law of the Republic of Kazakhstan "O taxes and other obligatory payments in the budget" of April 24, 1995 No. 2235 in edition for July 1, 2001 (further - the Law on taxes).
According to article 54 of the Law on taxes, taxpayers on value added the nonresidents of the Republic of Kazakhstan who are performing activities through permanent organization, having the taxation objects according to article 53-1 of the Law on taxes are recognized.
According to Item 1 of article 72 of the Law on taxes, in case of sales of goods (works, services) in the territory of the Republic of Kazakhstan by the nonresidents who are not recognized according to article 54 of the Law on taxes taxpayers the Republic of Kazakhstan, object of VAT liability for resident is the turnover on sales of goods (works, services) performed from the territory of the Republic of Kazakhstan by the called nonresidents.
Thus, in case of absence at the nonresident Company in the territory of the Republic of Kazakhstan of permanent organization and if loan was issued outside the Republic of Kazakhstan, these services will not be recognized leviable turnover of resident on the VAT according to article 72 of the Law on taxes. Similarly these services will not be recognized leviable turnover of resident on the VAT in the presence at the nonresident in the territory of the Republic of Kazakhstan of permanent organization.
On the second question.
According to Item 1 of article 241 of the Code of the Republic of Kazakhstan "About taxes and other obligatory payments in the budget" of December 10, 2008 No. 99-IV ZRK (further - the Tax code), works, the services provided by the nonresident who is not the taxpayer on value added in the Republic of Kazakhstan and not performing activities through branch, representation are turnover of the taxpayer of the Republic of Kazakhstan getting job, services if the place of their realization is the Republic of Kazakhstan, and are subject to taxation on value added according to the Tax code.
Thus, during the period since January 1, 2009 if the nonresident performs the activities through representation, in the case under consideration these services will not be recognized leviable turnover on the resident subsoil user's VAT according to article 241 of the Tax Code.
On the third question.
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