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

of July 26, 2012 No. NK-21-YuL-R-1053-NK-7091

Whether the tax deduction provided by the subitem 4) of Item 1 of Article 166 of the Tax code RK will be applied if under the agreement of accumulative insurance the insurer, and the beneficiary, i.e. person for benefit of whom the agreement is signed, - the child of the insurer / insured is insured?

According to the subitem 4) of Item 1 of article 166 of the Code of the Republic of Kazakhstan "About taxes and other obligatory payments in the budget" (Tax code) in case of determination of the income of the worker assessed at payment source for every month within calendar year irrespective of frequency of payments the tax deduction in the form of the amount of the insurance premiums brought in own favor by physical person under agreements of accumulative insurance is applied.

According to Item 5 of article 166 of the Tax Code the right to the tax deductions established by subitems 3) - 5) Item 1 of this Article, is provided in the presence of the relevant documents:

1) the pension provision agreement at the expense of voluntary pension contributions and the document confirming payment of voluntary pension contributions;

2) the insurance contract and the document confirming payment of insurance premiums;

3) contracts of bank loan with housing construction savings bank for holding actions for improvement of housing conditions in the territory of the Republic of Kazakhstan and the document confirming repayment of remuneration on the specified loan.

Thus, if under the agreement of accumulative insurance insurance premiums are paid to advantage of the child of the worker who is the insurer, in case of determination of the income of the worker assessed at payment source, legal basis for application of the tax deduction, Item 1 of article 166 of the Tax Code provided by the subitem 4), no.

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