LETTER OF THE TAX COMMITTEE OF THE MINISTRY OF FINANCE OF THE REPUBLIC OF KAZAKHSTAN

of December 8, 2009 No. HK-06-26/12514

The Tax Committee of the Ministry of Finance of the Republic of Kazakhstan brings to your attention the decision made at departmental meeting on some questions of confirmation of statement of taxpayers on registration accounting on the value added tax (further - the VAT).

I. By the subitem 2) of Item 3 of article 569 of the Code of the Republic of Kazakhstan «About taxes and other obligatory payments in the budget» (Tax code) it is determined that the basis for refusal to the taxpayer in voluntary statement on registration VAT accounting is that circumstance that from the date of removal of the taxpayer from VAT accounting based on the decision of tax authority two years did not expire.

It should be noted that according to article 4 of the Law of the Republic of Kazakhstan state bodies and officials when implementing the state functions and ex-officio full powers make decisions by the edition of legal acts «On ministerial procedures».

At the same time, according to article 5 of the Law of the Republic of Kazakhstan «About ministerial procedures», the legal act of state bodies shall meet the following requirements:

1) the legal act shall not contradict the Constitution of the Republic of Kazakhstan, the legislation and legal acts of higher state bodies;

2) the structure of the legal act shall provide exhaustive disclosure of subject of regulation, and content shall provide uniform understanding and application of the prepared legal act;

3) in the legal act content of the planned measures shall be accurately stated, the group of people to whom action of the legal act extends and (or) which bear responsibility for their realization at the scheduled time is more exhaustively determined;

4) the legal acts requiring realization at the subordinate levels of management shall contain specific orders to certain state bodies and (or) officials on their accomplishment.

It should be noted that the Decision on refusal in confirmation of statement on registration VAT accounting passed by tax authority according to article 44 of the Law of the Republic of Kazakhstan «About enforcement of the Code of the Republic of Kazakhstan «About taxes and other obligatory payments in the budget» (Tax code)» (further - the Law) conforms to the above-stated requirements.

In this connection, the removal of the taxpayer from registration VAT accounting made based on the decision on refusal passed by tax authority in confirmation of statement on registration VAT accounting is the basis for refusal of tax authority in voluntary statement of the taxpayer on registration VAT accounting according to the subitem 2) of Item 3 of article 569 of the Tax Code if from the date of removal of the taxpayer from registration VAT accounting on the above-stated basis two years did not expire.

Based on the above, we report about withdrawal of earlier directed explanation concerning 3 letters of November 10, 2009 No. HK-06-26/11222 concerning refusal in voluntary statement on registration VAT accounting on the subitem basis 2) of Item 3 of article 569 of the Tax Code to the taxpayers struck off registration VAT accounting for cause of failure in confirmation of statement on registration VAT accounting.

II. According to Item 1 of article 44 of the Law of person, staying on registration VAT accounting till June 30, 2009 inclusive, shall till December 1, 2009 for confirmation of statement on registration accounting as the payer of the VAT submit to tax authority in the location the documents determined by this Article.

According to Item 3 of article 44 of the Law in case of confirmation of statement on registration VAT accounting by tax authorities issue of the certificate on statement on registration VAT accounting is made.

Thus, persons having certificates on registration on the VAT shall undergo the procedure of confirmation of statement on registration accounting as the payer of the VAT.

As a result to persons which underwent this confirmation the certificate on statement on registration VAT accounting is granted.

At the same time by item 4 of article 44 of the Law it is determined that the persons specified in Item 1 of this Article, who did not address to tax authorities till December 1, 2009 for confirmation of statement on registration accounting as the payer of the VAT, stop being payers of the VAT since January 1, 2010.

Thus, article 44 of the Law governs the relations arising between the state and taxpayers on obligatory confirmation of statement on registration accounting as the payer of the VAT.

So, Item 1 of article 571 of the Tax Code governs the relations on removal from registration VAT accounting of the payer of the VAT based on the tax statement for registration VAT accounting submitted to tax authority in the location if for the calendar year preceding year of submission of the tax statement, the size of leviable turnover did not exceed turnover minimum on realization, stipulated in Clause 568 Tax codes.

Therefore, the relations on confirmation of the payer of the VAT, the stipulated in Article 44 Laws, are various from the relations arising based on Item 1 of article 571 of the Tax Code.

Thereby, regulations concerning removal from registration VAT accounting based on the tax statement on the taxpayers who did not address to tax authority for confirmation of statement on registration VAT accounting till December 1, 2009, do not extend.

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