We w ould like to remind you about the deadline for filing the Local File report for Transfer Pricing (“TP”) purposes, w hich is mandatory for submission to the Kazakhstan tax authorities by participants of multinational enterprise groups (“MNE Group”).
Submission deadline
The Local File is submitted to the authorized bodies on an annual basis no later than 12 months follow ing the reporting financial year. The submission deadline for FY2021 is until December 31, 2022
Who has obligation
The obligation to submit Local File is assigned on members of MNE Group, carrying out transactions in the reporting financial year, subject to TP control in accordance w ith the Kazakhstan’s TP Law , as w ell as under the condition, that the amount of revenue of a MNE Group participant for the financial year, preceding the reporting financial year (i.e. 2020) is at least 5 million of Monthly Calculation Index (“MCI”) (~13,3 billion KZT).
Local File discloses material transactions w ith its related parties. It is important to note that from 3 June 2022 the main changes to the forms and rules for filling of Local File w ere introduced:
- Definition of the material category of controlled transactions was introduced, w hich is defined as a category of controlled transactions, the total amount of income (expenses) and (or) liabilities for w hich is at least 250,000 MCI (~ 730 million tenge as of 2021);
- If the participant does not have material categories of controlled transactions in the reporting financial year, the Local file submission would not be required;
- Local File must include additional information in the “Responsibility of a member of the international group” section, such as name, contact number, company address and email address.
These rules should be applied to the Local File for 2021, if such report w as not provided to the tax authorities yet.
Responsibility for non-submission/incomplete submission
Please note that in case of non-submission or incomplete submission of the above-mentioned report by a participant of MNE Group, the TP legislation imposes an administrative fine of up to 500 MCI (~3,000 USD). The amount of the fine is not material, how ever, w e note that this fact may attract attention of tax authorities, w ho may initiate cameral control or tax inspection on TP issues.
How can we help
We are ready to provide all the necessary consulting support to your company on this issue, to help w ith the analysis of the applicability of these requirements to your company, to provide support for preparation of the above-mentioned reports.
If you are interested in additional information, please contact us.
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