EY-Global-oil-and-gas-tax-guide-2014

Kazakhstan
283
Volume of annual oil production, including gas condensate,
for each calendar year (thousand tons)
MET
2014
Up to 7,000 inclusively 13%
Up to 10,000 inclusively 15%
Over 10,000 18%
These rates are reduced by 50% if the production is processed domestically in
Kazakhstan either by the producer or by a purchaser. There are special rules for
the calculation of tax bases in such cases.
In the case of natural gas that is exported, a flat rate of 10% applies. If the gas
is sold to the domestic Kazakhstan market, rates are reduced to between 0.5%
and 1.5% depending on the level of annual production.
Bonuses
Subsurface users are expected to pay two types of bonus:
• Signature bonus
• Commercial discovery bonus
Signature bonus
The signature bonus is a lump-sum amount paid by a subsurface user for the
right to use the subsurface.
For oil exploration contracts, the bonus is a fixed amount of 2,800 MCI, 1 which
is equivalent to KZT 5,185,600. For oil production contracts, where reserves
have not been approved, the bonus is a fixed amount of 3,000 MCI, which is
equivalent to KZT 5,556,000. Where reserves have been approved, the bonus
is calculated by a formula that applies a rate of 0.04% to the approved reserves
and 0.01% to the provisionally approved reserves, but not less than 3,000 MCI.
For production contracts, the signature bonus should not be less than the
amount of the commercial discovery bonus.
Commercial discovery bonus
The commercial discovery bonus is a fixed payment paid by subsurface users
when a commercial discovery is made on the contract territory.
The basis for calculation of the commercial discovery bonus is defined as the
value of the extractable minerals duly approved by the competent State
authorities. The value of the mineral resources is determined using the market
price established at the International (London) Petroleum Exchange in Platts.
The rate of the commercial discovery bonus is fixed at 0.1% of the value of
proven extractable resources.
Corporate income tax
CIT is applied to all companies at the rate of 20% of taxable income previous
years. Taxable income is calculated as the difference between aggregate annual
income (after certain adjustments) and statutory deductions.
Deductions
All expenses incurred by a taxpayer in carrying out activities that are directed
at the receipt of income are deductible for the purpose of determining taxable
income. Examples of expenses that are allowed for deduction can be found
below (but this list is not exhaustive):
• Interest expense (within limits)
• Contributions to the decommissioning fund; the procedure for making such
contributions and the amount to be established in the subsurface use
contract
1 The monthly calculation index (MCI) is KZT1,852 as of 1 January 2014.