Refund of excess VAT in Kazakhstan
A VAT refund (or offset) in Kazakhstan is a procedure for the state to reimburse the amount of tax incurred when the VAT offset exceeds the accrued tax. The process is regulated by the Tax Code of the Republic of Kazakhstan (Articles 429–434) and depends on the category of your business.
Who is eligible for a VAT refund?
The following categories of taxpayers are entitled to a refund:
- Exporters (sale of goods, works or services taxed at a zero rate).
- Subsoil users (within the framework of subsoil use contracts).
- Companies purchasing goods/services for the construction of production facilities being commissioned for the first time.
- Taxpayers under international treaties, special economic zones (SEZ) and other special cases.
According to paragraph 2 of Article 429 of the Tax Code of the Republic of Kazakhstan, excess VAT that has accumulated at the end of the tax period in which zero-rate transactions were made is subject to refund if the following conditions are simultaneously met:
- the VAT payer sells goods, works, and services taxed at a 0% rate on a permanent basis (for 3 consecutive quarters, at least once in each quarter);
- turnover taxed at a 0% rate for the tax period is at least 70% of the total taxable turnover from sales.
If the specified conditions are not met, the excess VAT amount is subject to refund only in the part of the tax amount credited for goods (works, services) used for the purposes of sales turnover taxed at a zero rate.
The following excess tax amounts are not subject to refund:
1) applied as offset against invoices issued by a procurement organization in the agro-industrial complex;
2) applied as offset against goods, works, and services related to minerals transferred in kind to fulfill a tax obligation (including goods, works, and services related to the sale of such minerals);
3) accumulated over tax periods for which the taxpayer applied an additional tax amount as offset.
The taxpayer has the right to demand a refund of the excess tax amount in the next tax return within the limitation period.
The VAT refund is indicated in FNO 300.00 in Appendix 8.
If the VAT payer has not indicated a claim for a refund of excess VAT in form 300.00, then this excess is offset against upcoming VAT payments (which is prohibited for goods purchased from a non-resident) or is presented for refund within the limitation period (3 years).
Refund of excess VAT is made on the basis of:
- thematic inspection report;
- conclusions to the thematic inspection report.
The tax authority, upon receiving a request for a refund, appoints a thematic audit to confirm the veracity of the excess VAT claimed for a refund from the budget, after 30 calendar days have passed from the deadline established for submitting the VAT return.
If it is established that the taxpayer’s personal account does not contain an excess VAT amount or the procedure and deadlines for submitting Form 300.00 have been violated, the tax authority will notify the taxpayer within 10 working days from the date of submission of Form 300.00 of the refusal to consider the request.
Terms and procedure for return
Special procedure (for large investment projects/capital construction): Amounts can be returned in equal installments over 20 tax periods.
Simplified procedure: Available to exporters and other participants. Refunds are processed within 15 business days of filing the declaration. No audit is conducted if there are no outstanding notifications and the requirements of the risk management system (RMS) are met.
Based on the results of the thematic tax audit: Conducted within 55 working days after the deadline for filing the declaration.
