What is a change in the terms of fulfillment of a tax obligation

For taxpayers experiencing temporary financial difficulties, the Tax Code provides for the possibility of changing the deadlines for fulfilling the tax obligation to pay taxes and (or) fees to a later date.

Change in the deadlines for fulfillment of tax obligation is provided in the form of:

- deferement with one-time payment of tax amounts for a period not exceeding six months;

- installment with monthly or quarterly payment of tax amounts for a period not exceeding three years.

A deferement or installment payment of taxes and (or) fees may be granted to a taxpayer whose financial situation does not allow paying taxes and (or) fees within the prescribed period, however, there are sufficient grounds to believe that the possibility of their payment will arise during the period for which the deferement or installment is provided.

A deferement or installment payment may be granted for all types of taxes, except for taxes withheld at the source of payment, excise taxes, value-added tax on goods imported from the territory of the member States of the Eurasian Economic Union, as well as taxes received in accordance with the budget legislation of the Republic of Kazakhstan to the National Fund of the Republic of Kazakhstan.

How can one get a deferement or installment payment for taxes

A prerequisite for obtaining a deferement or installment payment is the pledge of a taxpayer's and (or) a third party's property or provision of a bank guarantee by a taxpayer.

The decision to change the deadline for fulfilling the tax obligation to pay taxes and (or) penalties or refusal to change it is made by the state revenue authority at a taxpayer's location within twenty working days from the date of receipt of a taxpayer's application in the form established by an authorized body.

To initiate change of deadlines for fulfillment of tax obligation to pay taxes and (or) fees, a taxpayer should apply to a relevant state revenue authority with a tax application if there is one of the following grounds available:

1. caused damage to a taxpayer as a result of force majeure (social, natural, man-made, environmental emergencies, military actions and other circumstances of force majeure);
2. production and (or) sale of goods, works or services by a taxpayer is seasonal;
3. property status of an individual who is not registered as an individual entrepreneur (excluding property that cannot be levied in accordance with the legislation of the Republic of Kazakhstan) excludes the possibility of a one-time tax payment;
4. a court's decision on application of the debt restructuring procedure;
5. the main activity of a taxpayer belongs to the economy sector of strategic significance according to the laws of the Republic of Kazakhstan;
6. submission of additional tax reporting by a taxpayer;
7. a taxpayer's consent with the amounts of accrued taxes and (or) fees specified in the notification on audit results.

The list of documents attached to an application:

1. the list of contractors-debtors of a taxpayer indicating the prices of contracts concluded with the relevant contractors-debtors and the terms of their execution, as well as copies of these contracts; 
2. documents confirming availability of grounds for changing the deadline for paying taxes and (or) fees;
3. documents for the property that may be the subject of pledge with attachment of an appraiser's report on assessment of the market value of property provided as collateral, or a bank guarantee agreement concluded between a guarantor bank and a taxpayer, and a bank guarantee. An appraiser's report on assessment of the market value of the pledged property should be drawn up no earlier than ten working days priot to the date of submission by a taxpayer of an application for a deferement or payment in installments.

The requirements applied to property

The property provided as collateral should be insured against loss or damage, and its market value should not be less than the amount of taxes and (or) fees specified in the statements on changing the deadline for fulfilling a tax obligation to pay taxes and (or) fees, taking into account the accrued interest for the period of validity deferements or installments, as well as expenses for its implementation in case of violation by a taxpayer of schedule for payment of taxes and (or) fees.

In case of violation of schedule for fulfillment of a tax obligation secured by a pledge of property of a taxpayer and (or) a third party and (or) a bank guarantee, a tax authority levies a penalty on the pledged property of taxpayer and (or) a third party or requires execution of a bank guarantee.

Then, the property is sold through bidding.

The procedure for sale of property pledged by a taxpayer and (or) a third party, as well as the property of a taxpayer (tax agent) limited at the disposal is determined by an authorized body.