On November 25, 2020, the Coordination Council for Financial and Economic Issues of KAZENERGY Association (hereinafter - the Coordination Council) held a meeting on “Taxation”, attended by representatives of government authorities and Association Members, in a videoconference mode
The meeting brought together representatives of the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan and companies affiliated to the Association: “NC “KazMunayGas” JSC, “Mangistaumunaigas” JSC, “Embamunaigas” JSC, “CNPC International in Kazakhstan” LLP, “Intergas Central Asia” JSC, “Engineering Company “Kazgiproneftetrans” LLP and others.
The following agenda topics concerning taxation of subsoil users were discussed:
- change in the calculation of excessive profits tax;
- introduction of a unified rate of conversion of metric ton to barrel for purposes of calculating the rent tax;
- change in the calculation of the mineral extraction tax rates for crude oil on the basis of volumes of production not according to the contract as a whole, but broken down by certain fields;
- issues relating to the concept and elimination of historical pollution;
- the issue relating to the allocation of expenses incurred on abandoned non-productive wells to deductions;
- issues relating to NRM, as well as the introduction of an explicit provision for applying NRM benefits;
- blurring the tax boundary for CIT and EPT in the framework of activities;
- cancelling the CIT “virtual income” taxation;
- full deduction of expenses for the development and social support of regions;
- deduction in full of expenses for GMF at old deposits.
Summarizing the results of the meeting, a decision was made to address some of the issues for consideration of the Working Group on Taxes under the Ministry of National Economy of the Republic of Kazakhstan, and the rest should be further discussed with the Association members, in view of the different positions on them.
