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

No. HK-21-28/12127

The Tax Committee of the Ministry of Finance of the Republic of Kazakhstan, having considered within competence your letter of October 1, 2010 No. 645-10/10, reports the following.

According to Item 1 of article 100 of the Code of the Republic of Kazakhstan of 10.12.2008. «About taxes and other obligatory payments in the budget» (further - the Tax code), expenses of taxpayers in connection with implementation of the activities directed to income acquisition are deductible in case of determination of the taxable income, except for the expenses which are not deductible according to the Tax code.

By Item 3 of the above-stated Article it is determined that deductions are made by the taxpayer in the presence of the documents confirming the expenses connected with its activities directed to income acquisition. These expenses are deductible in that tax period in which they were actually made, except for of the deferred expenses determined according to International Financial Reporting Standards and requirements of the legislation of the Republic of Kazakhstan about financial accounting and the financial reporting.

Deferred expenses are deductible in that tax period to which they belong.

According to Item 2 of article 56 of the Tax Code tax accounting is based on accounting data. The procedure for maintaining accounting documentation is established by the legislation of the Republic of Kazakhstan on financial accounting and the financial reporting.

In turn, Item 1 of article 7 of the Law of the Republic of Kazakhstan of February 27, 2007 «About financial accounting and the financial reporting» (further - the Law on financial accounting) provides that accounting documentation includes source documents, bookkeeping registers, the financial reporting and accounting policy.

Accounting entries are made based on source documents.

Based on Items 3, 4 above-stated Articles source documents both on paper, and on electronic media which forms or requirements to which are not approved according to Item 2 of this Article are developed by individual entrepreneurs and the organizations independently and shall contain the following obligatory details:

1) name of the document (form);

2) date of creation;

3) the name of the organization or surname and initials of the individual entrepreneur on behalf of which the document is constituted;

4) content of transaction or event;

5) units of measure of transaction or event (in quantitative and value term);

6) name of positions, surnames, initials and signatures of persons responsible for transaction making (confirmation of event), and correctness of her (his) registration;

7) registration taxpayer number.

Depending on transaction nature or event, requirements of regulatory legal acts of the Republic of Kazakhstan and method of processing of accounting information source documents can include additional details.

Source documents shall be constituted at the time of making of transaction or event or directly after their termination.

Therefore, for the purpose of calculation of the corporate income tax recognition of expenses is performed based on the relevant source documents developed according to requirements of the Law on financial accounting.

At the same time we find it possible to carry on deductions expenses on the goods (works, services) acquired based on the check of cash register in case of observance of the following conditions:

in the check the name, quantity and cost of goods (works, services) are specified;

availability of the expense report of person, in the subreport to which money on acquisition this goods is issued (works, services) or other source document confirming the fact of recognition of these expenses in financial accounting;

availability of the source documents confirming the fact of use of goods purchased (works, services) for the purpose of implementation of the activities directed to income acquisition (the route sheet, delivery note on material issue in production and others).

At the same time, we pay attention that according to the subitem 6) of Item 1 of article 20 of the Tax Code, bodies of Tax Service shall provide to the taxpayer (tax agent) information on the operating taxes and other obligatory payments in the budget.

Such explanations and comments do not belong to regulatory legal acts, are not obligatory for execution.

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