Phase 1, Legal and regulatory framework, May 2015 (reflecting the legal and regulatory framework as at March 2015) : Kazakhstan 2015.

94 Pages·2015·1.296 MB·English

by  OECD

Global Forum on Transparency and Exchange of Information GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE
for Tax Purposes
OF INFORMATION FOR TAX PURPOSES
PEER REVIEWS, PHASE 1: KAZAKHSTAN
The Global Forum on Transparency and Exchange of Information for Tax Purposes is the
multilateral framework within which work in the area of tax transparency and exchange of
information is carried out by over 120 jurisdictions which participate in the work of the Global Peer Review Report
Forum on an equal footing.
The Global Forum is charged with in-depth monitoring and peer review of the implementation Phase 1
of the standards of transparency and exchange of information for tax purposes. These
standards are primarily refl ected in the 2002 OECD Model Agreement on Exchange of Legal and Regulatory Framework
Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax
Convention on Income and on Capital and its commentary as updated in 2004, which has
been incorporated in the UN Model Tax Convention.
The standards provide for international exchange on request of foreseeably relevant KAZAKHSTAN
information for the administration or enforcement of the domestic tax laws of a requesting
party. “Fishing expeditions” are not authorised, but all foreseeably relevant information must
be provided, including bank information and information held by fi duciaries, regardless of the P
e
existence of a domestic tax interest or the application of a dual criminality standard. e
r R
All members of the Global Forum, as well as jurisdictions identifi ed by the Global Forum as ev
ie
relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1 w
reviews assess the quality of a jurisdiction’s legal and regulatory framework for the exchange Re
p
of information, while Phase 2 reviews look at the practical implementation of that framework. o
r
Some Global Forum members are undergoing combined – Phase 1 plus Phase 2 – reviews. t P
h
The ultimate goal is to help jurisdictions to effectively implement the international standards a
s
e
of transparency and exchange of information for tax purposes. 1
L
All review reports are published once approved by the Global Forum and they thus represent eg
a
agreed Global Forum reports. l a
n
For more information on the work of the Global Forum on Transparency and Exchange of d R
Information for Tax Purposes, and for copies of the published review reports, please visit eg
u
www.oecd.org/tax/transparency and www.eoi-tax.org. la
to
r
y
F
ra
m
e
w
o
rk
K
A
Consult this publication on line at http://dx.doi.org/10.1787/9789264233560-en. ZA
K
H
This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and S
T
statistical databases. A
N
Visit www.oecd-ilibrary.org for more information.
ISBN 978-92-64-23355-3
23 2015 13 1 P

Global Forum
on Transparency
and Exchange
of Information for Tax
Purposes Peer Reviews:
Kazakhstan 2015
PHASE 1: LEGAL AND REGULATORY FRAMEWORK
May 2015
(reflecting the legal and regulatory framework
as at March 2015)
ThisworkispublishedontheresponsibilityoftheSecretary-GeneraloftheOECD.
Theopinionsexpressedandargumentsemployedhereindonotnecessarilyreflect
theofficialviewsoftheOECDorofthegovernmentsofitsmembercountriesor
thoseoftheGlobalForumonTransparencyandExchangeofInformationforTax
Purposes.
Thisdocumentandanymapincludedhereinarewithoutprejudicetothestatusof
orsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersand
boundariesandtothenameofanyterritory,cityorarea.
Pleasecitethispublicationas:
OECD(2015),GlobalForumonTransparencyandExchangeofInformationforTaxPurposesPeer
Reviews:Kazakhstan2015:Phase1:LegalandRegulatoryFramework,OECDPublishing.
http://dx.doi.org/10.1787/9789264233560-en
ISBN978-92-64-23355-3(print)
ISBN978-92-64-23356-0(PDF)
Series:GlobalForumonTransparencyandExchangeofInformationforTaxPurposesPeerReviews
ISSN2219-4681(print)
ISSN2219-469X(online)
CorrigendatoOECDpublicationsmaybefoundonlineat:www.oecd.org/publishing/corrigenda.
©OECD2015
Youcancopy,downloadorprintOECDcontentforyourownuse,andyoucanincludeexcerptsfromOECD
publications,databasesandmultimediaproductsinyourowndocuments,presentations,blogs,websitesand
teachingmaterials,providedthatsuitableacknowledgmentofOECDassourceandcopyrightownerisgiven.
Allrequestsforpu[e-mail].
Requestsforpermissiontophotocopyportionsofthismaterialforpublicorcommercialuseshallbeaddressed
directlytotheCopyrightClearanceCenter(CCC)[email protected]çaisd’exploitationdu
droitdecopie(CFC)[email protected].
TABLE OF CONTENTS – 3
Table of Contents
About the Global Forum                                             5
Executive Summary                                                 7
Introduction                                                       11
Information and methodology used for the peer review of Kazakhstan        11
Overview of Kazakhstan                                            12
Recent developments                                               18
Compliance with the Standards                                       19
A. Availability of information                                        19
Overview                                                        19
A1 Ownership and identity information                               22
A2 Accounting records                                            39
A3 Banking information                                           43
B. Access to information                                             45
Overview                                                        45
B1 Competent Authority’s ability to obtain and provide information        46
B2 Notification requirements and rights and safeguards                  56
C. Exchanging information                                          59
Overview                                                        59
C1 Exchange of information mechanisms                              60
C2 Exchange of information mechanisms with all relevant partners         68
C3 Confidentiality                                                69
C4 Rights and safeguards of taxpayers and third parties                  73
C5 Timeliness of responses to requests for information                   74
PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – KAZAKHSTAN © OECD 2015
4 – TABLE OF CONTENTS
Summary of Determinations and Factors Underlying Recommendations    77
Annex 1: Jurisdiction’s response to the review report                    81
Annex 2: List of Kazakhstan’s exchange of information mechanisms        82
Annex 3: List of all laws, regulations and other relevant material          88
PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – KAZAKHSTAN © OECD 2015
ABOUT THE GLOBAL FORUM – 5
About the Global Forum
The Global Forum on Transparency and Exchange of Information for
Tax Purposes is the multilateral framework within which work in the area
of tax transparency and exchange of information is carried out by over
120 jurisdictions, which participate in the Global Forum on an equal footing
The Global Forum is charged with in-depth monitoring and peer
review of the implementation of the international standards of transpar-
ency and exchange of information for tax purposes These standards are
primarily reflected in the 2002 OECD Model Agreement on Exchange of
Information on Tax Matters and its commentary, and in Article 26 of the
OECD Model Tax Convention on Income and on Capital and its commen-
tary as updated in 2004 The standards have also been incorporated into
the UN Model Tax Convention
The standards provide for international exchange on request of fore-
seeably relevant information for the administration or enforcement of the
domestic tax laws of a requesting party Fishing expeditions are not authorised
but all foreseeably relevant information must be provided, including bank
information and information held by fiduciaries, regardless of the existence
of a domestic tax interest or the application of a dual criminality standard
All members of the Global Forum, as well as jurisdictions identified by
the Global Forum as relevant to its work, are being reviewed This process is
undertaken in two phases Phase 1 reviews assess the quality of a jurisdic-
tion’s legal and regulatory framework for the exchange of information, while
Phase 2 reviews look at the practical implementation of that framework Some
Global Forum members are undergoing combined – Phase 1 and Phase 2 –
reviews The Global Forum has also put in place a process for supplementary
reports to follow-up on recommendations, as well as for the ongoing monitor-
ing of jurisdictions following the conclusion of a review The ultimate goal is
to help jurisdictions to effectively implement the international standards of
transparency and exchange of information for tax purposes
All review reports are published once approved by the Global Forum
and they thus represent agreed Global Forum reports
For more information on the work of the Global Forum on Transparency
and Exchange of Information for Tax Purposes, and for copies of the pub-
lished review reports, please refer to wwwoecdorg/tax/transparency and
wwweoi-taxorg
PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – KAZAKHSTAN © OECD 2015

ExECUTIVE SUMMARY – 7
Executive Summary
1 This report summarises the legal and regulatory framework for
transparency and exchange of information in Kazakhstan The interna-
tional standard, which is set out in the Global Forum’s Terms of Reference
to Monitor and Review Progress Towards Transparency and Exchange
of Information, is concerned with the availability of relevant information
within a jurisdiction, the competent authority’s ability to gain timely access
to that information, and in turn, whether that information can be effectively
exchanged on a timely basis with its exchange of information partners
2 Kazakhstan is the ninth largest country in the world It is a land-
locked country located in Central Asia with a population of 179 million
Kazakhstan is an upper-middle-income country with GDP of approximately
EUR 194 billion (2013 estimate) 57% of the GDP is produced in the service
sector, followed by industry with 379% and agriculture 52% Almost half
of the GDP represents exports mainly of oil, oil products and natural gas
Kazakhstan is a member of several international organisations including
the United Nations, Organization for Security and Co-operation in Europe
or International Monetary Fund Kazakhstan became member of the Global
Forum on Transparency and Exchange of Information for Tax Purposes in
July 2012
3 Kazakhstan’s legal and regulatory framework requires that owner-
ship information regarding all relevant entities is available in Kazakhstan in
line with the international standard with the exception of foreign companies
and foreign partnerships Domestic companies and foreign companies having
a branch or representative office in Kazakhstan are required to register in the
Registry of Legal Entities and provide their statutory documents Domestic
companies are required to maintain a register of shareholders constituting
shareholder rights Companies’ shares can only be issued in dematerialised
form, ie as a set of electronic records on securities accounts which are
operated by companies’ registrars Persons providing nominee services are
covered by AML obligations and required to identify their clients The part-
ners in a partnership established under Kazakhstan’s law are required to be
identified in the foundation agreement of the partnership Kazakhstan’s law
does not recognise the concept of a trust, however, information on settlors,
PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – KAZAKHSTAN © OECD 2015
8 – ExECUTIVE SUMMARY
trustees and beneficiaries of trusts operated by Kazakhstan resident trustees
should be available in Kazakhstan based on tax law obligations Cooperatives
are required to keep a register of members
4 All relevant entities and arrangements are required under the
accounting law to keep accounting records that correctly explain the entity’s
transactions, enable it to determine the entity’s financial position with rea-
sonable accuracy at any time and allow financial statements to be prepared
Requirements under the accounting law are further supplemented by obliga-
tions imposed by the tax law Accounting records and underlying documents
including contracts and invoices must be kept by the accounting entity and
available in Kazakhstan for at least five years from the end of the relevant
accounting period
5 The legal and regulatory framework in Kazakhstan requires avail-
ability of banking information in line with the standard Identity information
of all account-holders and transactional information is required to be avail-
able through AML, accounting and banking law obligations
6 Kazakhstan’s competent authority has access powers to obtain and
provide information held by persons within its territorial jurisdiction, how-
ever, there are several deficiencies in Kazakhstan’s regulatory framework
which might have a negative impact on effective exchange of information
First, it is not clear how Kazakhstan’s access powers can be legally applied
for exchange of information purposes especially in cases where there is no
domestic tax at stake Further, Kazakhstan’s access to banking information
for domestic tax purposes is restricted in scope and it is questionable whether
Kazakhstan’s competent authority would be able to provide all the requested
banking information for exchange of information purposes In addition there
appear to be no effective sanctions applicable in cases where a taxpayer fails
to provide information requested by the tax authority and no domestic tax
is at stake Finally, Kazakhstan’s law provides for protection of information
held by lawyers and notaries without exceptions which is too broad and goes
beyond the international standard
7 Although a taxpayer can appeal against notice on the results of a
tax audit or against acts of the official person Kazakhstan’s legislation does
not require notification of the person subject to the exchange of information
(EOI) request
8 Kazakhstan has an extensive EOI network covering 99 jurisdictions
through 59 double tax conventions (DTCs) and the multilateral Convention
on Mutual Administrative Assistance in Tax Matters (the Multilateral
Convention (the Multilateral Convention) All agreements except for two
DTCs and the Multilateral Convention are in force Kazakhstan’s domestic
law contains restrictions on access to banking information which might limit
PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – KAZAKHSTAN © OECD 2015