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1. The experts of OLYMPEX ADVISERS successfully rendered services on representation and defense of the Client as a defendant in a tax authority’s claim against the Client for recovery of corporate income tax withheld at source before the Supreme Court of the Republic of Kazakhstan under the rules of a court of first instance and cassation instance of the Supreme Court of the Republic of Kazakhstan.

The essence of the dispute in defense of the Client’s position was the validity of its application of the provisions of the Agreement for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income. The Client exempted from taxation the income of a non-resident from rendering services in the Republic of Kazakhstan due to the latter’s lack of a permanent establishment in the Republic of Kazakhstan. However, the tax authority took the position that, taking into account the non-resident’s registered permanent establishment in the Republic of Kazakhstan, the Client was obliged to withhold corporate income tax at source retrospectively on the non-resident’s previously paid income. As a result, the experts of OLYMPEX ADVISERS proved that the provisions of the Tax Code do not contain norms obliging the tax agent to review previous periods and retrospectively impose corporate income tax on previously paid income of a non-resident.

As a result of the proceedings, the tax authority’s assessments were reduced by a total of 1,235,022,256 tenge (taxes by 883,671,445 tenge and penalty by 351,350,811 tenge), representing about 88% of the abolished tax and penalty amount.

Notes: The name of the Client company for the services described above is not disclosed in accordance with the confidentiality agreement between the parties.

Project team: Serik Zhamanbalin, Galymzhan Zhakupov, Dana Omarova, Yekaterina Nurperzentova, Ainagul Akisheva, Aiken Nuraly