As is well known, from 16 March 2020 a state of emergency was declared in the Republic of Kazakhstan (hereinafter, the “RK”). As a result, quarantine was introduced first in the capital and in Almaty, and subsequently across other regions of the country, which inevitably affected business entities.
Reduced Value Added Tax Rate
Given the difficult circumstances faced by businesses, the Government of the RK adopted a number of measures aimed at supporting taxpayers.
These measures also affected the value-added tax (“VAT”) rate, which is discussed in this article.
The standard VAT rate in the RK is 12 %, however, for a specific category of goods, it was decided to reduce the VAT rate to 8 %.
Which goods are subject to the reduced VAT rate?
The list of such goods is set out in Government Resolution No. 145 dated 1 March 2010. This list is exhaustive and includes 19 items classified as socially significant food products. It should also be noted that this tax benefit applies only to imports — i.e., the bringing of such goods into the territory of the RK.
Business entities importing these products should note that the 8 % rate is applicable until 1 October 2020.
Since this rule was introduced relatively recently, many businesses have already paid VAT at the rate of 12 %. In such cases, the difference will be credited by the state revenue authorities against future tax payments.
Entrepreneurs should also update the VAT rate in their cash register equipment (“KCMs”) from 12 % to 8 % to ensure proper accounting and documentation.
Exemption from Import Customs Duty
On 16 March 2020, the Eurasian Economic Commission of the member states of the Customs Union adopted a decision to exempt certain goods intended for the prevention and containment of COVID-19 from import customs duties. This exemption applies, in particular, to certain medicines and antiviral disinfectants.
This customs benefit applies to goods placed under the customs procedure of “release for domestic consumption.”
The exemption from import customs duty is applicable until 30 September 2020 inclusive, provided that the declarant submits documentation confirming the intended purpose of the imported goods.
The list of documents required to obtain confirmation of intended purpose includes:
Confirmation of intended purpose is issued by:
Taking into account the above, these measures represent timely and important government support for businesses during a challenging period.
If you have any questions after reading this article, we would be pleased to provide you with legal assistance.
Reduced Value Added Tax Rate
Given the difficult circumstances faced by businesses, the Government of the RK adopted a number of measures aimed at supporting taxpayers.
These measures also affected the value-added tax (“VAT”) rate, which is discussed in this article.
The standard VAT rate in the RK is 12 %, however, for a specific category of goods, it was decided to reduce the VAT rate to 8 %.
Which goods are subject to the reduced VAT rate?
The list of such goods is set out in Government Resolution No. 145 dated 1 March 2010. This list is exhaustive and includes 19 items classified as socially significant food products. It should also be noted that this tax benefit applies only to imports — i.e., the bringing of such goods into the territory of the RK.
Business entities importing these products should note that the 8 % rate is applicable until 1 October 2020.
Since this rule was introduced relatively recently, many businesses have already paid VAT at the rate of 12 %. In such cases, the difference will be credited by the state revenue authorities against future tax payments.
Entrepreneurs should also update the VAT rate in their cash register equipment (“KCMs”) from 12 % to 8 % to ensure proper accounting and documentation.
Exemption from Import Customs Duty
On 16 March 2020, the Eurasian Economic Commission of the member states of the Customs Union adopted a decision to exempt certain goods intended for the prevention and containment of COVID-19 from import customs duties. This exemption applies, in particular, to certain medicines and antiviral disinfectants.
This customs benefit applies to goods placed under the customs procedure of “release for domestic consumption.”
The exemption from import customs duty is applicable until 30 September 2020 inclusive, provided that the declarant submits documentation confirming the intended purpose of the imported goods.
The list of documents required to obtain confirmation of intended purpose includes:
- an application in the prescribed form;
- a contract or invoice;
- a document confirming quality;
- an agreement with the final recipient (e.g., a medical organisation), if available;
- a copy of the relevant permit.
Confirmation of intended purpose is issued by:
- the Committee for Quality and Safety Control of Goods and Services of the Ministry of Healthcare of the RK — for medicines and medical devices; and
- the territorial departments of the Committee for Quality and Safety Control of Goods and Services of the Ministry of Healthcare of the RK — for antiviral disinfectants.
Taking into account the above, these measures represent timely and important government support for businesses during a challenging period.
If you have any questions after reading this article, we would be pleased to provide you with legal assistance.