Review of the Supreme Court practice of the Republic of Kazakhstan
I. Resolution of the Judicial Board for Administrative Cases of the Supreme Court of the Republic of Kazakhstan No. 6001-24-00-6ап/515 dated November 12, 2024
Appeal against a notice based on the results of an inspection.
A desk tax inspection was conducted regarding the Company, resulting in a notice and additional charges of CIT, VAT, and penalties. Disagreeing with the inspection results, the Company appealed to the Ministry of Finance. Following the consideration of the complaint by the Ministry of Finance, the results of the tax inspection were partially annulled. The Company, partially disagreeing with the notice on the results of the complaint review, filed a court appeal.
Conclusions of the cassation court:
- Based on the literal interpretation of Articles 264 and 400 of the Tax Code, a taxpayer is entitled to recognize expenses as deductible, and VAT amounts as creditable, if the following conditions are met: actual receipt of goods, works, services; reflection of these transactions in accounting based on primary documents; compliance with invoice requirements; and the use of goods, works, services for taxable operations.
- Exclusion of expenses from deductions and VAT amounts from credits is possible only in the presence of a valid court act indicating the invalidity of transactions between counterparties or in the presence of a valid court verdict or a decision on case termination on non-rehabilitative grounds established during a tax inspection.
- In the course of the judicial appeal, it was established that the plaintiff's activities are aimed at generating income, the expenses incurred are supported by documents, and no circumstances were identified regarding the plaintiff and its counterparties that would exclude the expenses from deductions and VAT amounts from credits.
- The defendant failed to prove the occurrence of circumstances that could lead to the exclusion of expenses from deductions and VAT amounts from credits.
The cassation court upheld the conclusions of the lower courts on the partial satisfaction of the claim, leaving the defendant’s cassation appeal unsatisfied.
