NORMATIVE RESOLUTION OF THE SUPREME COURT OF THE REPUBLIC OF KAZAKHSTAN

of June 29, 2017 No. 4

About court practice of application of the tax legislation

Due to the need of explanation of separate regulations of the tax legislation plenary session of the Supreme Court of the Republic of Kazakhstan

decides:

1. According to Item 1 of article 2 of the Code of the Republic of Kazakhstan "About taxes and other obligatory payments in the budget (Tax code)" the tax legislation is based on the Constitution of the Republic of Kazakhstan (further - the Constitution), consists of the Tax code, and also regulatory legal acts which acceptance is provided by the Tax code.

The normative legal orders of the Government of the Republic of Kazakhstan, normative legal orders of the head of authorized body in system of bodies of state revenues, normative legal orders of the Minister of Foreign Affairs of the Republic of Kazakhstan on establishment of the specific sizes of rates of the consular fees (Item 2 of article 552 of the Tax Code) and normative legal decisions of local representative bodies of areas, cities of republican value and the capital on establishment of rates of separate taxes and other obligatory payments in the budget belong to such regulatory legal acts.

According to article 9 of the Tax Code the regulatory legal acts regulating the tax matters are subject to obligatory publication in official publications.

Of April 6, 2016 No. 480-V "About legal acts" (further - the Law on legal acts) follows from Item 1 of article 44 of the Law of the Republic of Kazakhstan that the necessary commencement provision of the normative legal orders of authorized body stated above, the Minister of Foreign Affairs of the Republic of Kazakhstan and normative legal decisions of the local representative bodies containing rules of law, including, the concerning rights and obligations of citizens, their state registration in judicial authorities is.

Courts by consideration of tax disputes have no right to apply the regulatory legal acts which are not corresponding to these conditions.

Courts should mean that the regulatory legal acts adopted concerning tax administration and enacted by the time of accomplishment of state revenues by body of action (failure to act) or pronouncement of the decision to them are subject to application in case of accomplishment of these actions (failure to act) or decision.

According to the subitem 5) of Item 1 of article 20 of the Tax Code bodies of state revenues shall perform explanations within the competence and give comments on origin, execution and the termination of the tax liability. Such explanations and comments, including authorized body, do not belong to regulatory legal acts. They are subject to assessment by court taking into account their compliance to regulations of the tax legislation.

2. In case of application of regulations of the legislation for the purpose of the taxation it is necessary to proceed from stipulated in Item 4 articles 2 of the Tax Code of priority of its regulations.

If the international treaty ratified by the Republic of Kazakhstan establishes other rules, than those which contain in the Tax code are applied rules of the specified agreement (Item 5 of article 2 of the Tax Code). According to Item 3 of article 4 of the Constitution the procedure and conditions of action in the territory of the Republic of Kazakhstan of international treaties which participant is Kazakhstan are determined by the legislation of the Republic.

3. According to item 4 of Article 1 of the Civil code of the Republic of Kazakhstan (further - group of companies) the civil legislation is not applied to the tax relations, except as specified, provided by legal acts. In this regard courts should differentiate the tax relations from the property relations regulated by the civil legislation.

According to the subitem 1) of Item 1 of article 609 of the Tax Code the penalty fee is one of methods of ensuring execution of the tax liability which is not executed at the scheduled time. Therefore reduction charged on the amount of taxes and other obligatory payments of the budget of the size of penalty fee which is not paid in time based on Article 297 of group of companies, and also exemption of penalty fee on the bases, unforeseen by Article 610, Item 7 of article 637 of the Tax Code is not allowed.

4. No. 4 is excluded according to Normative the Resolution of the Supreme Court of the Republic of Kazakhstan of 04.03.2020

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