Tax preferences
TAX PREFERENCES FOR
INVESTMENT PRIORITY PROJECT
In accordance with Article 290 of the Entrepreneurial Code of the Republic of Kazakhstan, tax preferences are granted to legal entities of the Republic of Kazakhstan in the manner and under the conditions stipulated by the tax legislation of the Republic of Kazakhstan.
Types of tax preferences:
- reduction of the calculated amount of corporate income tax by 100 percent;
- application of the coefficient 0 to land tax rates;
- calculation of property tax at a rate of 0 percent of the tax base;
KPN
An organization implementing an investment priority project to create new production facilities and (or) to expand and upgrade existing production facilities:
1) reduces the corporate income tax calculated in accordance with Article 302 of this Code by 100 percent on income received from the implementation of priority types of activities through the operation of fixed assets that were introduced as new production facilities, expanded or updated within the framework of a priority investment project.
The income of an organization implementing a priority investment project from other types of activities that are not related to priority ones is subject to corporate income tax in the generally established manner.
An organization implementing an investment priority project maintains separate tax records of taxable objects and (or) objects related to taxation for the purpose of calculating tax liabilities.
If the provisions of the investment contract for the implementation of a priority investment project for the expansion and (or) renewal of existing production facilities provide for the phased introduction of fixed assets that produce products, then separate tax accounting is maintained for each fixed asset that produces products in accordance with the tax accounting policy.
An organization implementing a priority investment project does not have the right to apply other provisions of this Code for such a project that provide for a 100 percent reduction in corporate income tax;
2) determines depreciation charges for the value balances of groups (subgroups) of fixed assets put into operation within the framework of a priority investment project by applying the depreciation rates established by paragraph 2 of Article 271 of this Code to such value balances of groups (subgroups) at the end of the tax period.
The deadline for applying such a reduction in CIT:
1) on the creation of new production facilities:
begins on January 1 of the year in which the investment contract for the implementation of the priority investment project is concluded;
ends no later than ten consecutive years, which are calculated starting from January 1 of the year following the year in which the investment contract for the implementation of the priority investment project was concluded;
2) for the expansion and (or) renewal of existing production facilities, except for the cases specified in subparagraph 3) of this paragraph:
begins on January 1 of the year following the year in which the last fixed asset producing output was put into operation within the framework of an investment contract for the implementation of a priority investment project;
ends no later than three consecutive years, which are calculated from January 1 of the year following the year in which the last fixed asset producing output was introduced within the framework of an investment contract for the implementation of a priority investment project;
3) for the expansion and (or) renewal of existing production facilities with the phased introduction of fixed assets producing products, as provided for in the investment contract for the implementation of the priority investment project:
starts on 1 January of the year following the year in which the fixed asset producing the output is put into operation under the investment contract;
ends no later than three consecutive years, which are calculated from January 1 of the year following the year in which the fixed asset producing the products commissioned under the investment contract was put into operation.
The deadline applies to each fixed asset that produces products and is provided for in the investment contract for the implementation of a priority investment project for the expansion and/or renewal of existing production facilities.
LAND TAX
An organization implementing an investment priority project for the creation of new production facilities, when calculating land tax on land plots used for the implementation of the investment priority project, applies a coefficient of 0 to the corresponding land tax rates.
The deadline for applying part one of this paragraph:
1) begins on the 1st day of the month in which the investment contract for the implementation of the priority investment project for the creation of new production facilities is concluded;
2) ends no later than ten consecutive years, which are calculated starting from January 1 of the year following the year in which the investment contract for the implementation of the priority investment project for the creation of new production facilities was concluded.
The provisions of the first part of this paragraph shall not apply in cases of leasing (renting) or using on other grounds a land plot used for the implementation of a priority investment project, or part thereof (together with the buildings, structures, facilities located on it or without them).
PROPERTY TAX
An organization implementing an investment priority project to create new production facilities, for facilities first put into operation on the territory of the Republic of Kazakhstan, calculates property tax at a rate of 0 percent of the tax base.
The provisions of the first part of this paragraph shall apply to assets accounted for as part of fixed assets in accordance with international financial reporting standards and (or) the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting and provided for in the work program, which is an appendix to the investment contract concluded in accordance with the legislation of the Republic of Kazakhstan in the field of entrepreneurship.
The deadline for applying part one of this paragraph:
1) begins on the 1st day of the month in which the first asset is recorded as part of fixed assets in accordance with international financial reporting standards and (or) the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting;
2) ends no later than eight consecutive years, which are calculated starting from January 1 of the year following the year in which the first asset is recorded as part of fixed assets in accordance with international financial reporting standards and (or) the requirements of the legislation of the Republic of Kazakhstan on accounting and financial reporting.
The provisions of the first part of this paragraph shall not apply in cases of transfer of taxable objects for use, trust management or lease.
