ORDER OF THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN

of October 24, 2011 No. 1197

About approval of Rules of agreement signature on application of transfer pricing

According to the subitem 6) of Item 1 of article 4 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 of agreement signature on application of transfer pricing.

2. This resolution becomes effective after ten calendar days after the first official publication.

Approved by the order of the Government of the Republic of Kazakhstan of October 24, 2011 No. 1197

Rules of agreement signature on application of transfer pricing

1. General provisions

1. These rules of agreement signature on application of transfer pricing (further – Rules) are developed according to the Law of the Republic of Kazakhstan of July 5, 2008 "About transfer pricing" (further – the Law) and determine procedure for agreement signature by application of transfer pricing (further – the Agreement) between authorized bodies – the Tax Committee of the Ministry of Finance of the Republic of Kazakhstan (further – the Tax Committee), the Customs Control Committee of the Ministry of Finance of the Republic of Kazakhstan (further – the Customs Control Committee) and the participant of the transaction.

2. In the Agreement the following items are reflected:

1) general provisions;

2) agreement parties;

3) subject of the agreement;

4) the list of the submitted documents;

5) method of determination of market price;

6) information source applied to determination of market price;

7) duration of the agreement;

8) the date of entry into force of the Agreement;

9) the term of provision of information on the applied prices during operation of the Agreement;

10) confidentiality;

11) effects of non-execution (violation) by the participant of the transaction of terms of agreement;

12) bases of early agreement cancelation;

13) additional terms.

2. Procedure for agreement signature on application of transfer pricing

3. The participant of the transaction submits in the Tax Committee the application on agreement signature in writing and in any form to which the copies of the documents necessary for agreement signature including are attached:

1) the certificate * or the certificate of state registration (re-registration) of the legal entity, constituent documents (the charter, the foundation agreement), statements from the register of shareholders (share), the holding more than 5% shares (shares);

note: * the certificate on the state (accounting) registration (re-registration) of the legal entity (branch, representation) issued before enforcement of the Law of the Republic of Kazakhstan of December 24, 2012 "About modification and amendments in some legal acts of the Republic of Kazakhstan concerning state registration of legal entities and accounting registration of branches and representations" is valid before the termination of activities of the legal entity.";

2) business and identification number (individual identification number (for physical persons);

3)  No. 905 is excluded according to the Order of the Government RK of 04.07.2012

4) identity document;

5) the certificate on state registration as the individual entrepreneur;

6) contracts for realization and purchase of goods (with amendments and changes);

7) the contracts for subsurface use (with amendments and changes) signed with competent authority of the Republic of Kazakhstan and (or) with the Government of the Republic of Kazakhstan;

8) information on investments (shares) in the companies of the Republic of Kazakhstan and foreign countries;

9) data on coherence of the parties;

10) the source of information on market prices used in case of the conclusion of transactions;

11) the method offered for determination of market price;

12) the strategy of business including marketing policy (commodity, sales, price, and also policy of promotion of goods in the market), pricing methodology, including information concerning factors which influence price fixation, reputation in the market.

In case of impossibility of submission of the documents specified in subitems 6), 7), 8), 9), 10), 11) and 12) of this Item, the participant of the transaction represents written reasons about impossibility of their representation.

4. In case of realization (acquisition) of goods (works, services) to the interconnected companies the participant of the transaction signing the Agreement submits also the documents connected with realization (acquisition) of these goods (works, services) to the interconnected companies.

5. Authorized bodies consider the application of the participant of the transaction on agreement signature within ninety working days from the date of obtaining from the participant of the transaction of the specified statement in the following procedure:

The Tax Committee directs the application of the participant of the transaction and the copy of the documents necessary for agreement signature, to the Customs Control Committee for consideration within five working days from the date of receipt of the statement from the participant of the transaction;

The Customs Control Committee represents to the Tax Committee within thirty working days the conclusion according to the statement of the participant of the transaction and documents necessary for agreement signature;

in case of adoption by authorized bodies of the positive decision on agreement signature the Tax Committee within five working days from the date of decision making to the participant of the transaction directs the Agreement signed by authorized bodies existing during the term which is not exceeding three years from the date of its signing;

the participant of the transaction after agreement signature within ten working days from signature date of the Agreement sends it to the Tax Committee.

In case of decision making about refusal of agreement signature by the Tax Committee within five working days from the date of decision making by results of consideration of the application of the participant of the transaction the written answer with causes of failure in agreement signature goes for agreement signature taking into account the conclusion of the Customs Control Committee to the participant of the transaction.

6. Authorized bodies refuse to the participant of the transaction agreement signature in the following cases:

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