Worldwide transfer pricing reference guide 2014

Kazakhstan
Taxing authority and tax law
In Kazakhstan, the tax and customs authorities are authorized to regulate transfer pricing. The tax authorities include:
• The Tax Committee of the Ministry of Finance (TCMF) of the Republic of Kazakhstan and its territorial tax bodies
• The customs authorities, including the Customs Control Committee (CCC) of the Ministry of Finance, its territorial subdivisions, custom
houses, customs points, checkpoints at the customs border of the Republic of Kazakhstan, and specialized customs offices
Relevant regulations and rulings
The Law of the Republic of Kazakhstan, No. 67–IV on Transfer Pricing of 5 July 2008, regulates transfer pricing. Additionally, transfer
pricing in Kazakhstan is regulated by the following subordinate legal acts:
• Rules for monitoring transactions (No. 1324 of 11 November 2011)
• Rules for concluding agreements on the application of transfer pricing (No. 1197 of 24 October 2011)
• Rules on the procedure for cooperation with authorized bodies in examining transfer pricing issues (No. 129 of 26 March 2009)
• List of goods (including work and services) in international business transactions which are subject to transaction monitoring
(No. 293 of 12 March 2009)
• List of officially recognized sources of information on market prices (No. 292 of 12 March 2009)
• List of exchange quoted goods (No.638 of 6 May 2009)
OECD Guidelines treatment
Although Kazakhstan is not a member of the OECD, the current transfer pricing law in Kazakhstan has some common features with the
OECD Guidelines. However one of the principal differences from the OECD Guidelines is that the Kazakhstan transfer pricing legislation
targets all international business transactions, regardless of whether the parties are related or not.
Priorities/pricing methods
The transfer pricing law supports five pricing methods, given in order of priority: CUP, Cost Plus, Resale Price, Profit Split and TNMM.
Although the methods have similar names, their application may differ from that described in the OECD Guidelines.
Transfer pricing penalties
Special penalties are in place for failure to comply with the documentation requirements established by the transfer pricing legislation
(i.e., monitoring reporting and documentation supporting the transaction price). The maximum amount of penalty is set at
approximately US$4,000.
Transfer pricing penalties are also imposed on individuals for personal liability for an administrative violation. It also includes
criminal liability, if the tax amount misreported exceeds approximately US$226,000. Such violations can result in investigation by the
financial police and in the prosecution of individuals who are held responsible for violations.
The penalty for an understatement of tax resulting from a transfer pricing adjustment is up to 50% of the additional accrued tax amount.
In addition, interest for the delayed payment of the additionally assessed tax resulting from the transfer pricing adjustment is calculated
at two and a half times the National Bank refinancing rate.
Penalty relief
The legislation in Kazakhstan considers cases for penalty relief when an entity may be exempt from administrative liability. These
cases, amongst others, include exemption from administrative liability in connection with active repentance, an insignificant violation,
expiration of the statute of limitations, and exemption on the basis of an act of amnesty.
Despite legal provisions allowing for exemption, in practice, implementation is quite rare.
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