The Majilis Approved Amendments to Draft Law on Combating Capital Outflow: What Does it Mean?
Majilis deputies approved amendments to the draft law on transfer pricing in the first reading on 13 December 2023. This will help combat capital outflow from the country and the loss of state income during international business transactions.
This bill expands the definition of the interconnectedness of the parties to strengthen control over the outflow of capital. For example, some large taxpayers create artificial intermediary structures that take minimal risk in the subsequent sale of exported products. At the same time, it is essentially impossible to identify companies as interconnected with each other, said Finance Minister Yerulan Zhamaubayev.
According to him, there are cases when taxpayers sell the entire amount of raw materials to an "exclusive" trader at low prices.
In fact, it turns out, as I said, that legally such companies are not interconnected, and financial statements for these traders are not available. At this point, there is a risk of capital outflow from the country because there is not enough information on the transactions being verified, the minister explained.
The bill will eliminate this gap and expand the concept of the parties' interconnectedness.
Within the framework of the bill, it has also been proposed to introduce control over the transfer pricing of transactions made on the country's commodity exchanges:
There is no such control now, and transactions often take place at below-market prices. This again creates an opportunity to withdraw capital from the country,
the Finance Minister explained.
On the sidelines of the Majilis, Zhamaubayev later told how much additional income the budget would receive after the introduction of these norms:
It's hard to name the exact amount. It's almost impossible. We proceed from the inspections that were carried out by the State Revenue Committee, so we see the approximate amount — this is 50-100 billion tenge of additional budget revenues, the minister concluded.
He noted that the decision was timely. There are a lot of schemes, traders, and intermediaries who receive additional income from transfer pricing. The law will limit such opportunities.
Original Author: Dilnaz Mamyrova
DISCLAIMER: This is a translated piece. The text has been modified, the content is the same. Please refer to the original piece in Russian for accuracy. The original article was posted on 13/12/2023.
Latest news
- What Has KazMunayGas Been Doing for Past Two Years?
- A Restless Night in Kulsary
- Karakalpak Activists Detained in Kazakhstan Convicted in Absentia at Home
- No Forgiveness: Reactions to Bishimbayev's Sentence.
- Gift for "Old Kazakhstan"? Proposals Made to Decriminalise Certain Crimes
- Head of British Foreign Ministry Visits Astana
- Will Russia Outpace Kazakhstan in Chinese Gas Market?
- "Cases Are Absolutely Absurd" — Human Rights Activists on Cases against Journalists in Kazakhstan
- Orda Interviews Residents of Petropavlovsk's Flooded Suburbs
- Case Involving Journalist Adilbekov: Interior Ministry Commented on Situation
- Is Moscow Extending Reach to Kazakhstan's Oil?
- 500 Tons of Fuel Stolen from National Guard Unit: New Details Emerge
- This Is Foolish and over The Top: Forensic Expert Halimnazarov Comments On Russian Colleagues' Conclusions
- Israeli Ambassador to Kazakhstan Gives Exclusive Interview to Orda.kz, Comments on Recent Attack on His Country.
- Assault, Extortion, Police: Kazakhstani Transgender Sex Workers Reach Out
- Bishimbayev Trial: Baizhanov Could Not Be Intimidated
- "Not a Cousin, but Bishimbayev's Distant Relative": - Bakhytzhan Baizhanov's Lawyer
- Finnish Minister Arrives in Kazakhstan, Sanction Circumventing to Be Discussed
- Deputies Once Again Concerned about LGBT+ Despite Other Problems
- "I Hear The Water": Kostanay Residents in Evacuation Centers Shared Stories about Flood