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

of January 30, 2009 No. HK-17-28/640

The Tax Committee of the Ministry of Finance of the Republic of Kazakhstan, having considered your letter of January 6, 2009 No. 1, reports the following.

On the corporate income tax

According to Item 1 of Article 708 of the Civil code of the Republic of Kazakhstan according to the freight forwarding agreement one party (freight forwarder) shall for remuneration and at the expense of other party (the client - the sender or the consignee) to execute or organize accomplishment of the services defined by the agreement of expedition connected with cargo hauling including to sign on behalf of the client or on its own behalf the agreement (agreements) of cargo hauling.

According to Item 2 of Article 708 of the Civil code in the part which is not settled by Chapter 35 of the Civil code provisions of Chapter 41 of the Civil code are respectively applied to the relations under the agreement of expedition if the freight forwarder under the terms of the agreement acts on behalf of the client, and provisions of Chapter 43 of the Civil code - if he acts on its own behalf.

So, according to the subitem 2) of Item 1 of Article 849 of the Civil code the principal shall if other is not provided by the agreement of the order, to refund to the attorney the incurred expenses which were necessary for execution of the order.

Also Item 1 of Article 876 of the Civil code it is established that the consignor shall, in addition to payment of commission fee, and in appropriate cases and extra fee for the del credere, compensate to the broker the amounts spent by it on execution of the order.

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