Review of the Ruling of the Supreme Court of Kazakhstan on a Tax Dispute

On 08 February 2024, the Administrative Board of the Supreme Court issued a ruling on a tax dispute related to transactions with suppliers who, according to the tax authority, did not actually supply goods or render services to the audited taxpayer, as a result of which the taxpayer's expenses incurred in connection with transactions with these suppliers were excluded from deductions and VAT was excluded from offsetting*.

The Supreme Court did not uphold the tax authority's position, deeming the results of the contested tax audit unlawful in relevant part.

The main conclusions of the Supreme Court are as follows:

·            The tax authority failed to disprove circumstances supporting the validity of VAT offsetting and deduction expenses submitted by the taxpayer during the tax audit. This failure constitutes a violation of the principle of presumption of reliability.

The principle of presumption of reliability stipulates that facts or information presented by a taxpayer are presumed to be true or valid until the tax authority provides sufficient evidence to refute this presumption (as per Article 15 of the Administrative Procedural Code of Kazakhstan).

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