Dear Readers,
The tax authorities are preparing to launch a Pilot Project to modernize the process for VAT refunds using digital tenge (referred to as the “Digital VAT Pilot Project”). The public discussion of the draft order on the Open Legislative Acts portal was completed on 2 September 2024.
Pilot Project Procedure
Participation in the pilot project will be voluntary for VAT payers. A taxpayer’s payment in digital tenge under the established procedures will be regarded as an acknowledgement of participation in the pilot project.
A taxpayer participating in the pilot project:
- Opens a digital account in the digital tenge system through second-tier banks;
- Purchases digital tenge to fund the digital account using money from their current bank accounts;
- Makes payments to suppliers using digital tenge;
- Settles VAT obligations with the state budget using digital tenge;
- Submits a request for a VAT refund on the VAT declaration.
Within the payment process the bank marks a portion of the digital tenge equal to the VAT amount on the electronic invoice. This marking limits the use of the digital tenge to VAT payments, either to the state budget or to another VAT-registered supplier.
Participants in the pilot project can freely convert unmarked digital tenge back into their regular bank accounts at second-tier banks.
VAT Refund Procedure
The following taxpayers are eligible for VAT refunds under the Digital VAT Pilot Project:
- Exporters of goods;
- Sellers of fuel and lubricants to foreign airlines for international flights;
- Sellers of refined gold to the National Bank, where the gold was extracted by the taxpayer or purchased for processing.
A taxpayer is eligible for a refund of the excess VAT related to goods purchased using digital accounts within the digital tenge system, provided that the taxpayer used the goods for zero-rated transactions and the taxpayer’s suppliers have fulfilled their tax obligations by submitting their VAT declarations.
The tax authorities will process the VAT refund requests submitted on the VAT declarations within fifteen business days without tax audits. The tax authorities will verify the accuracy of the requested VAT refunds using data from the state revenue authorities and the National Bank’s information systems. If the VAT refund claim cannot be validated, the taxpayer may follow the refund procedures outlined in Articles 429, 431, and 432 of the Tax Code.
The approved VAT refund will be remitted to the taxpayer’s bank account in tenge, via the Interbank Money Transfer System, without using the digital tenge system.
The Digital VAT Pilot Project is expected to run until 31 December 2025.