LETTER OF THE TAX COMMITTEE OF THE MINISTRY OF FINANCE OF THE REPUBLIC OF KAZAKHSTAN

of May 21, 2009 No. HK-23-43/4783

The Tax Committee of the Ministry of Finance of the Republic of Kazakhstan for the purpose of calculation of severance tax and in connection with the arriving questions concerning procedure for recalculation of the world prices in tenge, reports the following.

According to Item 1 of article 335 of the Code of the Republic of Kazakhstan of 10.12.2008. "About taxes and other obligatory payments in the budget" (Tax code) the tax amount on mining which is subject to payment in the budget is determined proceeding from the taxation object, tax base and rate.

According to Item 9 of article 31 of the Tax Code the tax liability on tax payment, other obligatory payments in the budget, and also the obligation for payment of penalty fee and penalties are performed in national currency.

According to Items 3 and 4 of article 334 of the Tax Code the world price of crude oil and gas condensate is determined as arithmetic-mean value of daily quotations of each Urals Med brand or "Dated Brent" (Brent Dtd) in tax period based on information published in source of "Plaits Crude Oil Marketwire" of the The McGraw-Hill Companies Inc company, and in the absence of price information on the specified brands in this source the source of "Petroleum Argus", on the following formula is used:

S = (P1 + P2 +..... + Pn) / n, where:

S - the world price of crude oil and gas condensate for tax period,

P 1, P 2,... Pn - the daily arithmetic-mean world price of crude oil, gas condensate in days of the publication of quotations during tax period,

n - the number of days in tax period in which quotations were published.

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