THE ORDER OF THE DEPUTY PRIME MINISTER - THE MINISTER OF FINANCE OF THE REPUBLIC OF KAZAKHSTAN

of December 15, 2022 No. 1287

About approval of Rules of determination of the income from intellectual property items and rendering services in the field of informatization to which reduction of the amount of the estimated corporate income tax by 100 percent is applied

According to Item 4-3 of Article 293 and item 4 of article 709 of the Code of the Republic of Kazakhstan "About taxes and other obligatory payments in the budget" (Tax code) I ORDER:

1. Approve the enclosed Rules of determination of the income from intellectual property items and rendering services in the field of informatization to which reduction of the amount of the estimated corporate income tax by 100 percent is applied.

2. To provide to committee of state revenues of the Ministry of Finance of the Republic of Kazakhstan in the procedure established by the legislation of the Republic of Kazakhstan:

1) state registration of this order in the Ministry of Justice of the Republic of Kazakhstan;

2) placement of this order on Internet resource of the Ministry of Finance of the Republic of Kazakhstan;

3) within ten working days after state registration of this order in the Ministry of Justice of the Republic of Kazakhstan submission to Department of legal service of the Ministry of Finance of the Republic of Kazakhstan of data on execution of actions.

3. This order becomes effective since January 1, 2023 and is subject to official publication.

It is approved Ministry of digital development, innovations and aerospace industry of the Republic of Kazakhstan

Approved by the Order of the Deputy prime minister - the Minister of Finance of the Republic of Kazakhstan of December 15, 2022 No. 1287

Rules of determination of the income from intellectual property items and rendering services in the field of informatization to which reduction of the amount of the estimated corporate income tax by 100 percent is applied

Chapter 1. General provisions

1. These rules of determination of the income from intellectual property items and rendering services in the field of informatization to which reduction of the amount of the estimated corporate income tax by 100 percent is applied (further - Rules) are developed according to Item 4-3 of Article 293 and item 4 of article 709 of the Code of the Republic of Kazakhstan "About taxes and other obligatory payments in the budget" (Tax code) (further - the Tax code) and establish procedure for determination of the income by members of the international technological park "Astana Hub" and special economic zone (further - SEZ) from intellectual property items and rendering services in the field of informatization to which reduction of the amount of the estimated corporate income tax is applied (further - KPN) for 100 percent.

2. The main terms and determinations used in these rules:

1) the organization performing activities in the territory of special economic zone (further – the participant of SEZ) – the legal entity corresponding to the conditions provided in Items 1 or 2 of article 708 of the Tax Code;

2) priority types of activity in the territory of special economic zone - the types of activity included in the list of priority types of activity by special economic zones approved by the order of the Minister of Industry and construction of the Republic of Kazakhstan of February 22, 2024 No. 72 "About approval of Rules of maintaining the list of the priority types of activity performed in the territory of special economic zones and the List of priority types of activity by special economic zones" (it is registered in the Register of state registration of regulatory legal acts at No. 34030);

3) priority types of activity of the international technological park "Astana Hub" – the types of activity included in the list of priority types of activity in the field of information and communication technologies approved by the order of the Minister of digital development, the defense and aerospace industry of the Republic of Kazakhstan of April 11, 2019 No. 37/Tax Code "About Approval of the List of Priority Types of Activity in the field of Information and Communication Technologies and Self-produced Criteria" (it is registered in the Register of state registration of regulatory legal acts at No. 18523);

4) the member of the international technological park "Astana Hub" (further – the participant "Astana the Hub") – the legal entity corresponding to conditions, stipulated in Item 4-3 articles 293 of the Tax Code;

5) outsourcing – transfer to the third parties of the separate functions necessary for creation of intellectual property items;

6) intellectual property items – the software protected by the Law of the Republic of Kazakhstan "About copyright and the related rights", and also the invention, useful model, industrial design, in the field of informatization, implementation of the priority types of activity provided for participants "Astana the Hub" and SEZ protected by the Law of the Republic of Kazakhstan "The patent law of the Republic of Kazakhstan", being result.

Chapter 2. Procedure for determination of the income from intellectual property items to which reduction of the amount of the estimated corporate income tax by 100 percent is applied

3. The income from intellectual property items to which reduction of the amount of the estimated KPN by 100 percent is applied is determined with exclusive property rights of the owner on intellectual property items and includes the income from:

1) realization of intellectual property items;

2) sales of goods with intellectual property item;

3) royalty on intellectual property items;

4) the awarded compensations for violation of the rights of the owner and the patentee on intellectual property items;

5) the income from intellectual property items connected with their use for commercial purposes (the income from advertizing in mobile applications and other intellectual property items, sales of in-game assets, sales of the additional functionality or paid content which is built in intellectual property item).

When making the international business transactions and transactions connected with the international business transactions on intellectual property items, the income from such objects is determined taking into account articles 10 and 12 of the Law of the Republic of Kazakhstan "About transfer pricing" (further – the Law on transfer pricing).

4. In case of determination of the income, from intellectual property items to which reduction of the amount of the estimated KPN by 100 percent is applied the following expenses are considered:

the incurred expenses connected with intellectual property item;

expenses on outsourcing to persons which are not the interconnected parties;

expenses on outsourcing to the interconnected parties which are outside the Republic of Kazakhstan;

expenses on acquisition of intellectual property item.

5. To the expenses specified in item 4 of these rules, belong including the expenses incurred in the previous tax periods from works start date on intellectual property item.

6. When making the international business transactions and transactions connected with the international business transactions on intellectual property items, expenses, stipulated in Item 4 these rules, are determined taking into account articles 10 and 12 of the Law on transfer pricing.

7. The income from intellectual property items to which reduction of the amount of the estimated KPN by 100 percent is applied is determined as the work of income amount, Item 3 of these rules provided by subitems 1), 2), 3), 4) and 5), and interrelation coefficient) which is calculated on the following formula:  

a – the incurred expenses connected with intellectual property item, except for the expenses specified in d;

b – expenses on outsourcing to persons which are not the interconnected parties;

c – expenses on outsourcing to the interconnected parties which are outside the Republic of Kazakhstan;

d – expenses on acquisition of intellectual property item.

Coherence of the parties is determined according to Item 2 of article 1 of the Tax Code.

The interest payment, all-administrative expenses, expenses connected with property and any other costs which are not connected directly with intellectual property items do not join as expenses in case of determination of coefficient of interrelation.

If value of coefficient of interrelation more 1, that it is considered equal 1.

8. Participants "Astana the Hub" and SEZ keep separate tax accounting (on each intellectual property item) the taxation objects and (or) objects connected with the taxation according to the income from the intellectual property items which are result of implementation of priority types of activity and the income from activities, stipulated in Item 4-3 Articles 293 and Item 6 of article 709 of the Tax Code.

At the same time participants "Astana the Hub" and SEZ reflect in tax accounting policy procedure for expense allocation, the priority types of activity, and expenses carried to intellectual property items, being result of implementation on activities, stipulated in Item 4-3 Articles 293 and Item 6 of article 709 of the Tax Code.

9. When conducting separate tax accounting for calculation of the tax liability participants "Astana" and SEZ provide the Hub:

1) reflection in tax accounting of the taxation objects and (or) objects connected with the taxation for calculation of taxes and payments in the budget – on each intellectual property item;

2) submission of the single declaration on KPN in general on activities of the participant "Astana the Hub" or SEZ and the corresponding appendices to it – on each intellectual property item.

Chapter 3. Procedure for determination of the income from rendering services in the field of informatization to which reduction of the amount of the estimated corporate income tax by 100 percent is applied

10. Income gained as a result of implementation of the following priority types of activity belongs to the income from rendering services in the field of informatization to which reduction of the amount of the estimated KPN by 100 percent is applied:

1) services in research, carrying out analysis, designing, adaptation and setup of the software;

2) services in technical support;

3) services in transformation and data migration;

4) services in updating of the software;

5) services in testing of the software;

6) services in correction of the software;

7) services in software user training.

At the same time "Astana performed by participants the Hub" and SEZ activities at the same time corresponds to the following conditions:

1) implementation of activities in the territory of the Republic of Kazakhstan. For the purpose of this subitem implementation of activities in the territory of the Republic of Kazakhstan is the conclusion:

transactions according to the legislation of the Republic of Kazakhstan;

employment contracts with workers according to the Labor code of the Republic of Kazakhstan;

2) implementation of activities with the number of staff employees necessary for the actual implementation of activities;

3) availability at workers of the participant "Astana the Hub" and SEZ necessary for qualification and (or) working life, and (or) experience for the actual implementation of activities;

4) compliance of amount of the made expenses of the participant "Astana the Hub" or SEZ to actually necessary amount of expenses for activities implementation.

11. Confirmation about compliance of participants "Astana the Hub" and SEZ is issued to the conditions provided by subitems 2), 3) and 4) of part two of Item 10 of these rules by Managing company of special economic zone or the international technological park "Astana Hub" in case of compliance of the actual indicators to the indicators reflected in the business plan of the participant "Astana the Hub" or the feasibility statement on the project of the participant of SEZ.

In case of variation of the actual indicators from the declared indicators reflected in the business plan or the feasibility statement on the project, more than for 20 percent, such confirmation is not issued.

 

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