Tax & Law Services
- About Our Global Tax Services
- Country Tax Advisory
- Cross Border Tax Advisory
- Global Trade
- Global Compliance and Reporting
- People Advisory Services
- Private Client Services
- Tax Accounting
- Tax Performance Advisory
- Tax Policy and Controversy
- Transaction Tax
- Transfer Pricing and Operating Model Effectiveness
- VAT, GST and Other Sales Taxes
Tax policy and controversy
The successful outcome of a tax dispute directly depends on the practical knowledge and experience of specialists representing the interests of the taxpayer. However, each case is unique and should be considered separately. Given the specific features of each case, the time frames and possible negative consequences (for example, charging penalties on the assessed amount of taxes), it is necessary to work out an individual strategy to protect your interests. Assistance of our team assumes, first of all, determination and implementation of the most expedient and adequate strategy to protect the interests of your company.
EY team, which includes experienced tax specialists and qualified lawyers, will help you at any stage of the emergence and resolution of tax disputes, including preparation for tax audit and assistance at the time of its conduct, the resolution of disputes in extrajudicial and judicial proceedings (representation of interests to the state revenue authorities (SRA), in courts and other state authorities, etc.).
As part of our services, among other things, we offer the following:
Interaction with SRA
In view of the possible lack of necessary resources or expertise, taxpayers often encounter certain difficulties in interacting with SRA. Also, it should be noted that Kazakhstan’s tax legislation is subject to regular changes and, as a result, certain provisions may be controversial and ambiguous in interpretation. We will be happy to assist you in representing the interests of your company in the framework of interaction with SRA on various issues arising in the course of business activities and assist in obtaining clarifications.
Assistance in the course of in-house audit by SRA
In connection with the extensive use of in-house audit, the taxpayers are often notified of the results of in-house audits. In this case, failure to comply with such notifications may entail a tax audit of your company. We may help you minimize this risk. As part of this component we offer the following services.
- analysis of SRA notifications issued to your company
- preparation of an appropriate response or complaint against action of SRA in accordance with the requirements of the legislation of the Republic of Kazakhstan
- further communication with SRA in order to track the status of response to notification / complaint against action of SRA.
Assistance in the course of preparation for a tax audit
The key to a successful tax audit is effective preparation for its conduct in order to prevent potential risks of accrued additional taxes. We may help you prepare for a tax audit and minimize the risks of additional accruals. As part of this component we offer the following services.
- comprehensive or partial tax review of your company for identification of tax risks
- Provision of recommendations on minimization of identified risks.
Assistance in the course of a tax audit
Any insignificant error made by the tax payer in the course of a tax audit may entail severe negative consequences for a tax payer in the form of additional accruals. Using our extensive experience of interaction with SRA, we can provide you with the necessary assistance in the event of any controversial situations. As part of this component we offer the following services:
- participation in meetings with SRA to clarify specific issues
- analysis of documentation / information provided by SRA
- preparation of written and verbal responses to SRA requests
- analysis of actions and acts of SRA for their legitimacy, including services related to appealing against illegal actions.
Assistance in the preparation of an objection to the preliminary act of tax audit to SRA
In connection with the amendments made to the procedure of pre-judicial settlement of tax disputes in the Republic of Kazakhstan, we will be happy to provide you with the following services:
- analysis of the preliminary act of tax audit and determination of violations of substantive and procedural law provisions
- development of arguments supporting the company's position
--reparation and submission of an objection to SRA
- further communication and meetings with SRA to track the status of the objection and clarify possible issues
Assistance in the course of appealing the results of the tax audit to the Ministry of Finance of the Republic of Kazakhstan (MF)
As a result of appealing the results of tax audits, the amount of additional charges can be significantly reduced or completely cancelled. Having the necessary experience and resources, we can assist you in effectively appealing the results of the tax audit, which will help achieve the maximum result. As part of this component we offer the following services:
- analysis of the tax audit act and determination of violations of substantive and procedural law provisions
- development of a strategy to protect the interests of the company in the context of a tax dispute
- development of arguments supporting the company’s position
- preparation and submission of a complaint to the MF
- further communication and meetings with the MF to track the status of the complaint and clarify possible issues
- assistance in the process of mutual agreement of disputes or the forwarding of SRA requests to the tax authorities in other jurisdictions (if necessary).
Assistance in the course of appealing the results of the tax audit in the courts
The successful outcome of appealing the results of the tax audit in the courts of various instances, among other things, depends on the experience and qualifications of the lawyers representing your company. In view of the uniqueness of our team, which includes both lawyers and tax experts, your company's chances for a successful outcome of the appeal significantly increase. As part of this component we offer the following services:
- analysis of the MF decision and determination of violations of material and procedural law provisions (if any)
- development of a strategy to protect the interests of the company, taking into account the findings in the MF decision
- development of additional arguments supporting the company’s position
- assistance in the identification and collection of necessary evidence
- preparation and submission of a complaint to the court
- representation of the company in court
- preparation of procedural documents (for example, objections and motions)
- assistance in attracting forensic experts, specialists (if necessary)
- Analysis of the decision of courts at various levels and update of the strategy to protect the interests of the company
- assistance in the course of appealing against a court decision to a higher authority.
Assistance in the course of administrative proceedings
- assistance in the extension / suspension of the administrative case review period and imposition of fine
- communication and meetings with SRA to monitor the status of administrative case consideration
- representation of the company’s interests in the process of issuing a resolution imposing an administrative penalty
- assistance in the course of appealing the decision to impose an administrative fine, and representation of interests of the company to the state authorities and in courts
- analysis of the issued resolution and update of the strategy to protect the interests of the company.
Assistance in the course of criminal proceedings
- development of a defence strategy, engagement of a lawyer specializing in criminal matters
- coordination of the lawyer’s work and mutual development of the strategy on protection of the interests of the company.
EY is a leading company in the market and keep in contact with the MF at a highly professional level.
At the same time, the EY team has extensive practical experience in representing and protecting the interests of clients at any stage of interaction with SRA.
Among other qualities of our team, we would like to note the following.
- Team of 75 tax specialists and 30 lawyers
- More than 15 years’ successful practice
- 64% of the total amount of the additional taxes of our clients were cancelled subsequent to the results of the appeal
- More than 22 billion tenge of taxes and fines cancelled subsequent to the results of legal proceedings
- Active cooperation with business associations of the Republic of Kazakhstan (including National Chamber of Entrepreneurs, Association of Taxpayers of Kazakhstan, Council of Foreign Investors under the President of the Republic of Kazakhstan).
Based on the results of the appeal, our clients were able to significantly reduce the amount of additional tax charges. In this connection, let us introduce you to some of the latest results of our work on interaction with SRA.
Case study 1
Issue: On the basis of the VAT return submitted by our client demanding to return excess VAT, SRA conducted a limited scope tax audit.
Based on the results of the tax audit, a significant portion of the VAT claimed was refused for refund.
The reason for the refusal was numerous mistakes made by the client’s counteragents in recording of mutual settlements in VAT returns, as well as mistakes made by SRA during cross audits.
Solution: We helped the client to conduct comprehensive work with counterparties in order to eliminate the mistakes made and correctly reflect the mutual settlements with the client in the VAT returns for refiling a claim to return the excess VAT. Moreover, as part of appealing the results of the tax audit in court, we filed complaints against violation of the procedure for conducting cross audits by SRA with respect to counterparties that are recognized as bankrupt or allegedly absent at the place of registration by collecting the necessary evidence and conducting extensive work with suppliers. According to the results of the work performed, most of the non-refundable VAT amounting to more than 1 billion tenge was confirmed for refund.
Case study 2
Issue: As part of the due diligence of our client (a branch of a non-resident in the Republic of Kazakhstan), SRA imputed the branch with earnings received by the head office from rendering services outside the Republic of Kazakhstan, similar to the services rendered by the branch. As a result, CIT and VAT amounts were additionally assessed to the branch. At the same time, according to SRA, the branch was partially involved in the provision of services.
Solution: We helped the client to collect all necessary information that confirmed the client’s position. As part of our procedures, we also involved a team to resolve tax disputes in our office in the country of residence of the head office of our client, to collect the necessary evidence related to payment of the relevant tax by the head office from rendering services outside of Kazakhstan in this jurisdiction. We used this evidence when appealing the results of a tax audit of a branch in a judicial procedure based on the provisions of the relevant convention on avoidance of double taxation.
Moreover, we prepared the transfer pricing documentation, which helped to prove the legitimacy of our client’s position. Based on the results of our work, additionally assessed amounts of CIT and VAT of more than 1.5 billion tenge were cancelled.
Other EY services in Tax and Legal section:
This year's report is made up of known legislative changes, known government proposals for new legislation and the forecasts of EY’s tax policy leaders in 50 countries. The Outlook provides a trend analysis on the data and potential impacts on companies.