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A detailed and qualified approach to the development/updating of tax accounting policy makes it possible to successfully conduct tax planning procedures, specify the applicable tax accounting procedure, and avoid discrepancies in tax legislation during tax audits.

OLYMPEX ADVISERS is an active member of the Association of Taxpayers of Kazakhstan and KazEnergy Association; OLYMPEX ADVISERS experts participated in the development of the new Tax Code.

The introduction of the new Tax Code on January 1, 2018 led to the fact that the current tax accounting policy lost its relevance due to changes in the structure of the Tax Code, the ordinal numbers of articles, as well as content thereof. Significant innovations in the taxation and tax administration system came into effect. In this connection, the issue of the necessity to develop a Tax Accounting Policy (TAP) that complies with the new Tax Code is relevant for all taxpayers.

OLYMPEX ADVISERS has successful experience in the development of tax accounting policies for subsoil users in accordance with the provisions of the new Tax Code, as well as in the development of the Methodology for maintaining separate tax accounting in the context of the deposit, which is classified as a low-profit, high-viscosity, water-logged, marginal, and depleted, by establishing the relationship between the Tax accounting policy and the Methodology for maintaining separate tax accounting.

It should be noted that if the TAP does not provide for the procedure for maintaining separate tax accounting and/or if this procedure is inconsistent with the taxation principles, the tax authorities may in the course of tax control distribute “general” and “indirect” income and expenses for each contract activity by a proportion of “direct” income for each activity.

To facilitate the maintenance of separate tax accounting of taxable items and/or tax-related items, it is recommended that subsoil users have – along with the Tax Accounting Policy – a Methodology for maintaining separate tax accounting (hereinafter – Methodology) for the purpose of calculating the tax liability for contract activities when developing a low-profit, high-viscosity, water-logged, marginal, and depleted field. Accordingly, this Methodology should be interconnected with the Tax Accounting Policy.

The Methodology is based on the main key and auxiliary mechanisms and methods of distribution of actual accounting and taxation data, which, as a result, makes it possible to separate tax accounting for each subsoil use contract, in addition, in the context of deposits, including for a high-viscosity deposit, in order to determine the profitability of the said deposit. In particular, it allows determining the procedure for calculating the total annual income and deductions of a subsoil user in the context of deposits in order to determine the profitability of deposits.

Project team:

Galymzhan Zhakupov, Dana Omarova