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ORDER OF THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN

of April 29, 2016 No. 255

About approval of Rules (technique) of pricing on cotton-fiber

(as amended on 18-10-2021)

According to the subitem 3) of Item 10 of article 10 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 (technique) of pricing on cotton-fiber.

2. This resolution becomes effective after ten calendar days after day of its first official publication.

Prime Minister of the Republic of Kazakhstan

K. Masimov

Approved by the Order of the Government of the Republic of Kazakhstan of April 29, 2016 No. 255

Governed (technique) of pricing on cotton-fiber

1. General provisions

1. These rules (technique) of pricing on cotton-fiber (further - Rules) are developed according to the Law of the Republic of Kazakhstan of July 5, 2008 "About transfer pricing" and establish procedure for determination (calculation) for transaction prices (realization) on cotton-fiber.

2. Action of these rules extends to supply of cotton-fiber to the countries specified in Items 7-9 of these rules in other cases adjustment of the taxation objects and (or) objects connected with the taxation is made according to the procedure, established by the Law of the Republic of Kazakhstan of July 5, 2008 "About transfer pricing".

3. The terms and determinations used in these rules:

1) the agent - the trader's agent performing intermediary services in search of the buyer of cotton-fiber;

2) the price from information source - the cotton-fiber price received from determined by Rules of source of information;

3) the region of action of source of information (further - RDII) - the geographical territory for which market price of cotton-fiber is determined proceeding from data of this source of information;

4) advance payment - conditions of the forward contract on which payment of the delivered goods is made until its delivery;

5) base port - base port of transfer or purpose of load for the relevant RDII;

6) the base station - the base railway station of transfer, transition or purpose of load for the relevant RDII;

7) acceptable deviation - acceptable deviation of transaction price from market price;

8) the short-term contract - the contract signed by the exporter of cotton-fiber on advance payment condition less than 50 percent and (or) having effective period less than 3 months;

9) transaction price - the cotton-fiber price determined in the contract and shipping documents at which its actual realization was made;

10) market price - the price from information source corrected taking into account on differential;

11) the buyer - the legal entity or physical person (the nonresident of the Republic of Kazakhstan) acquiring cotton-fiber at the exporter;

12) the trader - person performing mediatorial functions in case of purchase and sale of goods, performance of works, rendering services independently and (or) at the request of the participant of the transaction;

13) the forward contract - the contract signed by the exporter of cotton-fiber on condition of receipt of advance payment of 50 and more percent and having effective period at least 3 months;

14) the exporter - the legal entity or physical person (resident of the Republic of Kazakhstan) exporting cotton-fiber from Kazakhstan;

15) the freight forwarder - the shipping company representing data on the cost of any work type or the services entering transport component of differential.

4. In these rules for determination of market prices of cotton-fiber the following sources of information are used:

1) Price Digest magazine and bulletin "Price Information" (appendix to the Price Digest magazine) (Tsena-Inform LLC, Russian Federation);

2) Price information of "Cotlook Cotton Quotes" (Cotlook Limited news agency, Great Britain);

3) EIKON, (Refinitiv company, Great Britain).

2. Regions of action of sources of information

5. Determination of RDII is made on each supply of cotton-fiber separately based on the data of the consignee specified in the cargo customs declaration and shipping documents of the exporter.

6. In each RDII market price of cotton-fiber is determined proceeding from that price which is published in this source.

7. For sources the Price Digest magazine and the bulletin "Price Information" the region of action of source of information are the countries: Russian Federation, Republic of Belarus, Republic of Moldova, Ukraine and Republic of Latvia.

8. For source Price information of "Cotlook Cotton Quotes" the region of action of source of information are the countries of Southeast Asia.

9. For source of EIKON the region of action of source of information are the countries of Europe (except for specified in other RDII).

3. Use of the prices from information sources

10. For determination of market price of the Kazakhstan cotton-fiber those prices which are determined in these rules are used.

11. When the cotton-fiber price in source of information is expressed not in dollars of the United States of America (further - the USA) for 1 ton of net weight, and in other sizes, the price is recalculated from source of information so that it expressed cotton-fiber cost in US dollars for 1 ton.

12. For reduction of the price from information source in compliance with transaction price the price from source is adjusted by means of differential. Each source of information has the components of differential.

13. Transaction price is determined by each delivery separately and compared to the price from appropriate source operating in the relevant RDII and the period of delivery.

4. Procedure for determination of the prices of cotton-fiber

Procedure for determination of the prices of cotton-fiber from source of information of the Price Digest magazine and the bulletin "Price Information"

14. For determination of market prices of the Kazakhstan cotton-fiber the "Foreign trade prices" on the cotton fiber imported to the Russian Federation specified in the Price Digest magazine and the bulletin "Price Information" are used.

15. The price published in the Price Digest magazine and the bulletin "Price Information" extends to that period which is specified in this edition.

16. Market price of cotton-fiber is determined by short-term contracts from the price of source of information existing during cotton-fiber shipment.

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