| Applicable Law |
 The law of Transfer Pricing in RK ¹ 67-IV dated 5.07.08.
The Customs Code of RK dated 5.04.03. ¹ 401-II
The Tax Code of RK dated 10.12.08. ¹ 99-IV |
Transfer pricing is regulated by the following:
a) Sole Ordered Text of Income Tax approved by Supreme Decree No 179-2004-EF; Arts. 32, numeral 4 and 32-A.
b) Bylaws approved by Supreme Decree No. 122-94-EF, articles 108 to 119. |
| Applicable Rules, Guidelines or regulations |
Government Regulation ¹ 293 dated 12 of March 2009 The special List of goods (works, services) on which international business transactions should be monitored is approved.
Government Regulation ¹ 292 dated 12 of March 2009 The List of officially recognizable in RK sources of information on market prices is approved. According to that comparability of sales prices when transactions monitoring is carried out.
Order of Minister of Finance of RK ¹ 129 dated 26 of March 2009 Establishes Rules of interaction order between authorized bodies when monitoring transfer pricing issues with the purpose of prevention of losses in state revenues regarding international business operations and transactions between RK residents, related to international business operations. Authorized bodies – tax and customs bodies.
Order of Minister of Finance of RK ¹ 62 dated 12 of February 2009 Provides procedure for transactions monitoring which is carried out by authorized bodies, filling in approved forms of reporting and documenting on transactions monitoring by a transaction participant.
Order of Minister of Finance of RK ¹ 63 dated 12 of February 2009 Establishes order for concluding a treaty on application of transfer pricing between authorized bodies – the Tax Committee of the Ministry of Finance, the Customs Supervision Committee of the Ministry of Finance and a transaction participant. |
Superintendence Resolution No. 167-2006/SUNAT Exceptions to the obligation of submitting the annual informative sworn statement and of having a technical study on transfer pricing.
Superintendence Resolution No. 008-2007/SUNAT By this legal disposition exceptions to the obligation of having a technical study on transfer pricing are extended.
Superintendence Resolution No. 061-2007/SUNAT Approves regulation and format for the submission of the Annual Informative Sworn Statement on Transfer Pricing Superintendence Resolution No. 086-2008/SUNAT Modifies the Superintendence Resolution No. 167-2006/SUNAT to facilitate the compliance of the formal obligations foreseen in the transfer pricing regulation. |
| Compatibility with OECD Guidelines |
Indicated statutory legal acts of RK were worked out according to principles, stated in the OECD documents on transfer pricing and in practice do not conflict with their regulations. However, these international documents are not ratified by RK, which means that in case of contradiction in estimation of value of transactions the statutory acts of RK will underlie. |
The Transfer Pricing Guidelines for multinational Companies and Tax Administrations approved by the Council of the Organization for Economic Cooperation and Development – OECD are applied as long as they are not contrary/against to the provisions adopted by this law. |
| Application of Priority of Methods |
In order to determine the market price one of the following methods is used:
- Comparable uncontrolled price method;
- “Cost plus” method;
- Resale price method;
- Profit split method;
- Net margin method.
If the comparable uncontrolled price method is not applicable then one of the abovementioned methods is sequentially applied. |
The method applied corresponds to other factors such as the activity of the company. There is no priority of methods. |
| Commonly used Data Bases for the Economic Study |
Sources of information for determining market price of the good (work, service) and other data needed for determining market price can be used in the following order:
- officially recognized sources of information on market prices;
- sources of information on exchange quotations;
- data from state authorities, authorized bodies of other countries and organizations on prices, differential, expenses and conditions which influence on deviation of transaction price from market price;
- information programs used for transfer pricing purposes, information, given by participants of transactions, and other sources of information.
When determining a market price if a transaction participant is registered in the country with preferential tax treatment, as per approved List, only officially recognized sources of information on market prices are used according to Government Regulation ¹ 292 dated 12 of March 2009 |
OSIRIS |
| Acceptance of Foreign Comparable Data |
Foreign comparable data is recognized on the information in foreign publications, assigned in Government Regulation of ÐÊ ¹ 292 dated 12 of March 2009 |
Foreign comparable data is taken to determine the comparable values for operations under analysis on transfer pricing. |
| Related Party Tax Return Disclosures Required |
Disclosures on transactions are conducted in special forms of reporting, according to the Order of Ministry of Finance ¹ 62 dated 12 of February 2009 on transactions monitoring, which are submitted to the Tax Committee online in Excel supported by hardcopy till April,15 of the year following to the reported one. Reporting period is a calendar year. The submission date for reports on transactions monitoring may be prolonged till the submission date for tax declaration on Corporate Income Tax (CIT). |
Virtual format No. 3560, version 1.1 emitted by the Tax Authority in Peru. |
| Minimum amount of transactions between related parties to present the Transfer Pricing studies |
Correction on taxation objects and objects related to taxation of exchange goods is not made in case of equivalence between transaction price and market price within price range indicated in the officially recognized source of information. Regarding agricultural products transactions correction on taxation objects and objects related to taxation is made if the deviation of transaction price from market price is more than ten percent.
Regarding export agreements, concluded within the period from March, 15 till July, 1 of the current calendar year in respect of agricultural products, produced (received) during one of the future months of the current calendar year, correction of taxation objects and objects related to taxation is not made if the transaction price is not lower than the price of commercial purchase of a specialized organization as of the current calendar year provided that given agricultural products would be accounted separately and cash resources enter the bank accounts of a transaction participant (seller) from non-resident at the amount of not less than fifty percent of total amount of export agreement during fifteen working days after conclusion of the export agreement.
Correction is made on taxation objects and objects related to taxation if such correction results in or can result in the increase of tax amount and other obligatory payments to the budget in the future. |
The minimum amount of transactions with a related party exceed one million nuevos soles (approximately US$ 320,000)
Amount of operations = (income, property transactions, acquisitions).
For operations made with related parties located in countries with low or null tax impositions (tax paradise) does not exist a minimum amount. |
| Obligation to present Transfer Pricing studies of related local companies |
The transfer pricing control is exercised on the following transactions:
 international business operations; operations, which are executed within RK in case of their direct relation with international business operations:
- on realizable natural resources extracted by a mining company as one of the parties;
- transactions on which one of the parties has tax allowance;
- transactions on which one of the parties has losses according to tax declarations during last two fiscal periods prior to the year of transaction settlement.
Control is exercised by authorized bodies through the instrumentality of:
- transactions monitoring;
- auditing;
- other procedures, established by RK legislation.
In accordance with RK legislation authorized bodies have the right to request information needed for determination of correctness of transaction price application from the following parties:
- public authorities;
- banks, organizations, which exercise certain types of bank operations;
- insurance and reinsurance companies, insurance brokers;
- professional participants of equity market;
- auditors, auditing companies;
- other organizations related to international business operations. |
It will be mandatory to present transfer pricing studies of related local companies when:
- One of the parties is not affected by the income tax, has exemptions to the income tax, belongs to differential tax regimen of the income tax, or has a signed agreement that warranties tax stability.
- One of the related parties has had loses in the last 06 (six) taxable periods. In case of any of these situations, the transactions must exceed one million nuevos soles (approximately USD$ 320,000) and the earned revenues should exceed six million nuevos soles (USD $ 640,000). |
| Applicable exemptions to present Transfer Pricing studies |
Correction on taxation objects and objects related to taxation, is not made if the deviation of transaction price from market price is within the price range, if such a transaction is coordinated with authorized bodies and if it does not violate the purview of law on price regulation in the following cases:
- when establishing or determining transaction price in the international agreement ratified by Republic of Kazakhstan;
- when establishing transaction price in agreements between the Government of RK and the governments of other states;
- when establishing transaction price according to decision of the Government of RK Transactions on goods (works, services) which are not included into the List are not subject to monitor.
However, participants which make transactions on such goods (works, services) are obliged to keep documents supporting the validity of applied price and submit them to the authorized bodies at request. |
The following are exempted:
- Natural People (persons), undivided inheritance, o conjugal society which do not origin revenues of third category.
- Companies that are part of the State entrepreneurial activity.
- Excepcionalmente, por el periodo 2006 y 2007, las transacciones que las empresas domiciliadas realicen con sus partes vinculadas docimiliadas no están obligadas a contar con estudio de precio de transferencia.
- Exceptionally, for the periods of 2006 and 2007, transactions conducted by resident companies with related parties are not required to have transfer pricing study. |
| Transfer Pricing Documentation Required |
The documentation supporting the applicability of transfer prices should always be maintained. |
In effect, the supporting documentation for the request of SUNAT should be maintained. |
| Documentation Required |
The set of obligatory documents includes:
documentation supporting the validity of transfer prices application inc.:
- the data on interrelation of parties;
- description of entrepreneurial activity of a transaction participant, description of industry the transaction participant acts in, and market conditions.
- forecasts, business strategy,
- methodology of transfer pricing including information related to the factors which influence on price determination.
- functional analysis, risk analysis, analysis of tangible and intangible assets;
- conclusion on the application of the “arm length” principle in international business operations;
- reporting according to IFRS including financial reporting;
method applied for market price determination;
source of information used for market price determination;
international business operations data with supporting documents on transactions attached and information required for differential determination;
description of goods (works and services) including physical characteristics, quality and reputation on the market, country of origin and a manufacturer, availability of trademark and other information related to the qualitative characteristics of goods (works and services);
terms of agreement;
business operations strategy;
commission fee (margin) of a trade broker (compensation for execution of trade – intermediary functions);
other data which validate correctness of transaction price application and influence on deviation value of transaction price from market price.
Transaction participants conducting transactions with goods which are not subject to monitor should keep documents supporting the validity of applied price and submit them to the authorized bodies at request.
| The documentation should be:
Entrepreneurial and functional description and risks analysis.
The organizational structure of the group.
Description of the controlled transactions.
Better analysis method.
Reasons for the rejection of other methods which were not elected.
Analysis of companies with which was made the comparison of the operations to be analyzed.
The agreement of the adjustments made with the compatible entities. |
| Deadline to Prepare Documentation |
Reporting on transfer pricing is submitted to the Tax Committee online in Excel supported by hardcopies till April, 15 of the year following to the reported one.
The reporting period is a calendar year.
The submission date for transactions monitoring reports can be prolonged till the submission date for tax declaration on Corporate Income Tax (CIT). |
The informative sworn statement is submitted within the 8 first months of the fiscal year, which means until August of each year according to the schedule published by SUNAT. |
| Applicable Penalties |
Responsibility for violation of transfer pricing legislation of RK is determined by Administrative Code of RK according to the art. 206-1 which includes following:
Not submission of reporting on transactions monitoring to tax authority during the period established by transfer pricing legislation of RK.
- leads to imposing a fine on officials, individual entrepreneurs at the amount of thirty monthly indices (MIs), on legal entities which are small and medium enterprises or non-profit organization
– at the amount of forty MIs, on legal entities which are large enterprises
– at the amount of seventy MIs (one MI is equal USD 8.5 in year 2009).
Detection of discrepancy between reported data on transactions monitoring and data obtained in the process of auditing which is more than 2000-fold amount of MI, established as of appropriate financial year by the republic budget law.
- leads to imposing a fine on officials, individual entrepreneurs at the amount of fifty monthly indices (MI), on legal entities which are small and medium enterprises or non-profit organization
– at the amount of two hundred MIs, on legal entities which are large enterprises
– at the amount of three hundred MIs (one MI is equal USD 8.5 in year 2009).
Failure to submit documents (including online submission) and transactions monitoring reports required for control execution to time established by public authority or refusal of submission.
- leads to imposing a fine on officials, individual entrepreneurs at the amount of thirty monthly indices (MI), on legal entities which are small and medium enterprises or non-profit organization
– at the amount of two hundred MIs, on legal entities which are large enterprises
– at the amount of three hundred and fifty MIs (one MI is equal USD 8.5 in year 2009).
Activity (inactivity) provided by the third part of the present article repeated during a year after imposing of administrative penalty
- leads to imposing a fine on officials, individual entrepreneurs at the amount of fifty monthly indices (MI), on legal entities which are small and medium enterprises or non-profit organization
– at the amount of two hundred and fifty MIs, on legal entities which are large enterprises
– at the amount of seven hundred and fifty MIs (one MI is equal USD 8.5 in year 2009). |
The non exhibit or not to submit the Technical Study to support the calculation of the transfer pricing according to the law is fined with 0.6% of the net income (Art. 177, numeral 25 of the Tax Code) The non exhibit or not to submit documents and other information that supports the calculation of transfer pricing, according to law, is fined with 0.6% of net income (Article 177, paragraph 27 of the Tax Code) |
| Reduction in Penalties |
Reduction in penalties is not provided. |
There are reduction in penalties:
With the payment, a rebate of 80% of the fine
Without payment, a rebate of 50% of the fine |
| Advance Pricing Agreement (APA) Program in Existence |
Agreement on preliminary pricing does work, it is regulated by the Order of Ministry of Finance of RK ¹ 63 dated 12 of February 2009 |
The Advance Pricing Agreement (APA) do exist in our legislation, it is based on the methods and criteria established by the law of the income Taxes and its bylaws. |
| Are Management Fees Deductible? |
Yes |
Yes |
| Contact Name, Firm, Telephone Number and Email Address |
Executive Director of auditing company «ÀÑÈÊλ Mr. Skala Vladimir Ilyich Tel. +7 7272 42 97 89 e-mail: office@asiko.kz |
CPC Ana María Dávila Bazán Tax & Legal Partner MRI CONSULTING & OUTSOURCING SAC 511 – 617 9401 adavila@mriperu.com |
