of March 24, 2004 No. NK-UM-08-1-21/2189
About reference on deductions of expenses on advertizing and exemption of the VAT of payment for placement of outdoor advertizing
According to article 92 of the Tax Code the expenses of the taxpayer connected with receipt of gross annual income are deductible in case of determination of the taxable income, except for the expenses which are not deductible according to the Tax code. Deductions are made in the presence of the documents confirming the expenses connected with receipt of gross annual income.
According to the subitem 7) of article 104 of the Tax Code the cost of the transferred property, the performed works, the rendered services by the taxpayer on a grant basis is not deductible.
At the same time, according to the subitem 1) article 3 of the Law of the Republic of Kazakhstan of December 19, 2003 "About advertizing", advertizing - extended and placed in any form, by means of any means, the information intended for the uncertain group of people and designed to create or maintain interest in physical person or legal entity, goods, trademarks, works, services and to promote their realization.
Thus, only the goods and services answering to advertizing signs are deductible.
According to article 206 of the Tax Code objects of VAT liability are:
1) leviable turnover;
2) leviable import.
According to Item 1 of article 212 of the Tax Code leviable turnover is the turnover on sales of goods (works, services) made by the payer of the VAT, except for turnover:
1) exempted from the VAT according to the Tax code;
2) the place of realization of which is not the Republic of Kazakhstan.
According to the subitem 26) of Item 1 of article 10 of the Tax Code realization is shipment of goods, performance of works and provision of services with sales objective, exchange, voluntary conveyance, and also transfer of the pledged goods to the pawnbroker.
According to Item 1 of article 489 of the Tax Code the payment for placement of outdoor (visual) advertizing is levied for the placement right in strip of withdrawal of highways public and in settlements in the territory of the Republic of Kazakhstan of objects of outdoor (visual) advertizing in the form of posters, stands, indicating panels, billboards, banners, posters and other subjects of stationary advertizing.
According to article 491 of the Tax Code of rate of payment are established proceeding from the area of the object of advertizing:
1) the Government of the Republic of Kazakhstan - on the objects of advertizing placed in strip of withdrawal of highways public of republican value;
2) local representative bodies - on the objects of advertizing placed in strip of withdrawal of highways public of local value and placed in settlements.
According to the subitem 10) Item 1 of article 10 of the Tax Code other obligatory payments - obligatory assignments of money (charges, duties, payments and payments) in the budget, made in certain sizes.
Follows from stated that the payment established by the Government of the Republic of Kazakhstan and local executive bodies is not realization value and, as a result, is not object of VAT liability.
First Deputy Chairman of MF RK Oil Company
Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info
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