Transfer pricing reporting: anticipated changes

On 3 September 2021, the Ministry of Finance of Kazakhstan circulated draft amendments to the forms and rules for transfer pricing reporting.

Besides editorial changes and amendments for consistency with other legislation of Kazakhstan, the most significant expected changes are:

• Clarifying the “local entity” definition – a participant of a multinational group obliged to submit a local file.
• Changing the “controlled transaction” definition – a transaction concluded with a related party subject to the transfer pricing control.
• Expanding the “category of controlled transactions” definition – the comparable economic conditions requirement is abolished.
• Introducing a materiality threshold for categories of controlled transactions included into a local file – 250,000 MCI for the total amount of income (expenses) and/or liabilities.
• Clarifying the “multiple year analysis” concept for applying a transfer pricing method – three and more calendar years.
• Clarifying that a local file should contain information on material categories of controlled transactions. In case a local entity does not have such transactions in a reporting financial year, a local file should not be submitted.
• Expanding the “Local entity reponsibilty” / “Multinational group member responsibility” section – adding name, legal address, telephone number and email of a local entity; full name, telephone number and a signature of a person who prepared the report.
• Adding the web address of the resource where the forms and rules for transfer pricing reporting will be available (https://kgd.gov.kz/ru/content/transfertnoe-cenoobrazovanie-1-1).

Authors:

• Anuar Mukanov
• Yuliya Barsukova