Transfer Pricing
Country Summary
Kazakhstan
This document summarizes the transfer pricing requirements and regulations in Kazakhstan. Kazakhstan, despite not being part of the EU or an OECD member, has formal transfer pricing documentation requirements for multinational groups. The document highlights key aspects of Kazakhstan’s transfer pricing regulations, explaining that they generally follow the OECD Guidelines. The regulations include a three-tier documentation approach, featuring the Master file, Local file, and Country-by-Country Reporting (CBCR). Notably, Kazakhstan’s TP documentation differs in format from the OECD’s template. This document also touches on the absence of specific related party definitions and the consideration of BEPS Action 13 for transfer pricing documentation.
Overview:
Transfer Pricing Regulations in Kazakhstan
Kazakhstan imposes formal transfer pricing documentation requirements for qualifying multinational groups. Although not an EU or OECD member, Kazakhstan’s transfer pricing rules largely align with the OECD Guidelines. The rules incorporate a three-tier documentation approach: Master file, Local file, and Country-by-Country Reporting (CBCR). However, it’s essential to note that these documents differ in format from the OECD’s templates.
Related Parties and Transfer Pricing Documentation
Unlike some jurisdictions, Kazakhstan’s TP legislation applies to all international transactions, whether or not the parties are related. This approach recognizes the relevance of BEPS Action 13 in transfer pricing documentation.
Dealing with Tax Havens and Blacklists
Kazakhstan categorizes low-tax jurisdictions and tax havens based on specific criteria. The document provides a comprehensive list of such countries and territories, which are subject to scrutiny regarding income tax rates and financial information confidentiality.
Advance Pricing Agreements and Audit Practices
Kazakhstan allows unilateral APAs with a three-year timeline. The export of commodities faces heightened scrutiny, and audits related to transfer pricing may result in additional tax liabilities, often leading to appeals.
Transfer Pricing Documentation Requirements
Kazakhstan adheres to BEPS Action 13 of the OECD, requiring a master file, local file, and CBCR. The level of detail varies depending on the complexity of the enterprises. Smaller and less complex enterprises face less stringent requirements than larger entities.
Economic Analysis and Benchmark Study
Kazakhstan prefers single-year analysis over multiyear assessments. The country allows the full range in the use of interquartile range and follows the OECD Guidelines in this regard.
Financial Statements and Reporting Deadlines
Kazakhstan mandates related-party disclosures in financial statements, including balance sheets, profit and loss reports, cash flow statements, equity statements, and notes. The document outlines specific requirements for TP relevant returns, documents, forms, and financials, including deadlines for submission.
Mandatory Language and Notification Requirement
The TP documentation should be in either Russian or Kazakh. Notification requirements are detailed, with information to be submitted either in hard copy or electronically, authenticated with an electronic signature.
Penalties and Interest Charges
Penalties are imposed for various compliance issues, including failure to submit, late submission, and incorrect disclosures, with specific penalties set for TP monitoring reporting requirements.