Pw C Tax Controversy and Dispute Resolution team is glad to share our successful practice in 2022 in appealing:
- results of the tax inspections,
- results of the cameral (desktop) control,
- refusal to refund overpayment on tax account,
- initiation of the unscheduled thematic tax inspection. Below w e prepared a summary of the most interesting cases.
Appeal of the results of desktop control
During 2022 w e assisted more than 10 large companies to successfully appeal the results of the desktop control, both in pre-trial stage and in courts. Previously, disputes on desktop control reached the Supreme Court. How ever, in the recent practice w e note that the tax authorities are accepting the position of taxpayers in pre-trial appeals in certain cases, i.e. the tax authorities started to consider the taxpayers' arguments in a more objective w ay.
Appeal of the tax inspection results
1. Long-term construction contracts
Our team represented a construction company in the appeal of a tax inspection results. The main tax assessments w ere related to the exclusion of expenses and amortization charges from CIT deductions due to the termination of a longterm construction contract. The Specialized Interdistrict Administrative Court of Astana city satisfied the taxpayer’s claim and canceled the additional CIT and VAT charges in the amount of approximately USD 1 mln.
2. Transfer pricing, WHT on income paid to a non-resident, deductions for fixed assets and geological survey expenses
Our team helped large oil and gas company to successfully appeal the tax assessments in the amount of USD 16 mln w ith respect to the follow ing matters:
- withholding tax for transfer pricing adjustment of income;
- exclusion from CIT deductions of the expenses for geological studies and preparatory w ork;
- unjustified extension of the period under inspection.
The Judicial Board for Civil Cases of the Supreme Court cancelled the decisions of the courts of the first and second instances and satisfied the company's appeal on the above matters (approximately USD 14 million).
Refund of the overpayment on VAT account
We helped the oilfield service company to refund overpaid VAT. The company had a VAT overpayment in the amount of USD 2.5 million. The tax authorities referred to the ongoing tax inspection and refused to refund VAT overpayment. We helped the company to refund the amount of USD 2 million. Also, the Specialized Interdistrict Administrative Court of Almaty satisfied the claim of the company to refund the remaining overpayment amount of USD 0.5 mln.
According to the administrative disputes practice available to us, this is the first court decision on a claim for compulsion, w hereby the tax authorities w ere obliged to refund the overpayment from the budget.
Appeal of the tax inspection initiation
We assisted large cosmetics company to successfully appeal the initiation of the unscheduled thematic tax inspection to the Specialized Interdistrict Administrative Court of Almaty city. The tax authority initiated the unscheduled thematic tax inspection w ithout any legal grounds.
The new Administrative Procedural Code (APC)
Please note that almost all of the above mentioned court decisions w ere based on the provisions of the new APC.
Our team includes leading tax professionals w ith w ide experience in pre-trial and court dispute resolution w ith the state authorities. We are ready to provide our assistance to companies at all stages of inspections w ith state authorities, as w ell as in the process of appealing the results of inspections
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