Dear Readers,

The Ministry of Finance introduced1 changes and additions to the Rules for the Application of the Risk Management System for the Excess VAT Refund.

The changes introduce exceptions to the procedure for the verification of suppliers of goods and services using the analytical report Pyramid. Tax violations identified as a result of the Pyramid report will not impact on the confirmation of the accuracy of the excess VAT amount, if:

  • The understatement of the VAT amount identified by comparing the supplier's VAT declaration and issued electronic VAT invoices does not exceed 10 times the Monthly Index Factors (the MIF) on the date of the Pyramid report;
  • Discrepancies between the supplier's VAT declarations and information reflected in the buyer's VAT invoice register do not exceed 10 times the MIF on the date of the "Pyramid" report;
  • The VAT payment deadline deferred or changed due to installment VAT payments;
  • The identified violations are of low-risk for which the tax authorities send notifications;
  • The identified violations are not confirmed upon request to the forwarder or commission agent to take measures to eliminate violations;
  • The suppliers eliminated violations in the supply chain of goods, works, and services.

Another improvement is the inclusion of companies providing services with railway transport facilities on the list of suppliers for whom the Pyramid report is terminated.

The amendments also bring the rules in line with the Tax Code changes. In particular, the deadline for the VAT refund to taxpayers which zero-percent turnover does not exceed 70% of the total taxable turnover reduced from 155 calendar to 75 business days.

The changes came into effect on 7 April 2023.

1 Decree No. 289 of the Acting Deputy Prime Minister - Acting Minister of Finance of the Republic of Kazakhstan, dated 20 March 2023 On Amendments and Additions to Decree No. 391 of the Minister of Finance of the Republic of Kazakhstan, dated 19 March 2018, On Approval of the Rules for the Refund of Excess VAT and the Application of Risk Management System to Confirm the Accuracy of the Amount of Excess VAT, as well as Risk Degree Criteria