Review of judicial practice: Protection of exporters’ rights in VAT refund (excess VAT)
This overview has been prepared based on the practical experience of our team, which directly represented the taxpayer’s interests in a prolonged dispute with the territorial tax authority. Owing to a well-developed strategy, we were able to prove the groundlessness of the refusal to refund the VAT excess amount, up to and including the cassation instance.
Case background:
Our client – a company (an exporter of truck tractors) – challenged a tax authority notice denying the refund of a VAT excess amount totaling KZT 116.3 million. The territorial tax authority justified its refusal on the following grounds:
- Technical discrepancies: Mismatch of HS codes in electronic invoices and import declarations.
- “Pyramid” report: Identification of violations both among direct suppliers and among second- and subsequent-tier counterparties.
- Procedural deadlines: Absence of responses to tax authority requests at the time the audit was completed.
Court decisions:
The Specialized Interdistrict Administrative Court of the West Kazakhstan Region partially satisfied the company’s claims (in the amount of KZT 94.8 million), recognizing the tax authority’s conclusions as unlawful. The appellate and cassation panels fully upheld these findings.
