|  | ||||||||||||||||||||||||||||||||||||||||||
 | | | | | | | | | | | | | | | |||||||||||||||||||||||||||||
TAX NEWS - DECEMber 2009 | |||||||||||||||||||||||||||||||||||||||||||
Kazakhstan tax: New rules for calculating advance payment of corporate tax for nonresident entities with PEsIn addition to the general advance corporate tax payments due during the year, a final "true-up" payment is due by 20 December of each year, along with an additional statement of advance corporate income tax for the year. For purposes of calculating and making advance corporate tax payments in years after the first year of operations, taxpayers are required to base the first quarter payment on one-fourth of the advance payments declared in the previous calendar year. Advance payments for the subsequent three quarters are based on the actual corporate tax paid in the previous year. As a result of the new requirements to include branch profits tax in the calculation process for advance tax payments and the methodology for calculating advance corporate tax payments, the impact of the inclusion of branch profits tax in the advance tax payment calculation will effectively be phased in over a period of years. The impact of the new provisions can be demonstrated as follows: Assumptions / 2008 / 2009 / 2010 Profit 100,000 120,000 140,000 Applicable corporate tax rate 30% 20% 20% Applicable branch profits tax rate 15% 15% 15% Advance tax declared 25,000 24,417** 34,904** (4,167+20,250) (6,104+28,800) Corporate income tax 30,000 24,000 28,000 Branch profits tax* 10,500 14,400 16,800 * Branch profits tax applies to after-tax profits (e.g. for 2008 (100,000 – 30,000) x 15%) ** Figures are based on calculations below. When calculating advance tax payments for the first quarter of 2009, taxpayers should consider advance tax payments declared in the previous year, and the first quarter payment for 2009 should be one-fourth of such amount. Any change in the corporate tax rate should also be considered. Therefore, in the example, the first quarter 2009 advance tax payment required would be 25,000 x .25 x 20/30 (change in tax rate) or 4,167. The remaining three 2009 advance tax payments should be based on the actual prior year corporate and branch profits tax due for 2008. Thus, for the last three quarters of 2009, advance tax payments would be (30,000 + 10,500) x .75 x 20/30 or 20,250. For the first quarter of 2010, the advance tax payment due would be 24,417 x .25 or 6,104. For the subsequent three quarters, the advance tax payments due would be (24,000 + 14,400) x .75 or 28,800. As the above demonstrates, advance payments for previous years will continue to include an increasing element of branch profits tax until ultimately all branch profits tax will be included in the subsequent years' advance tax payment process. As previously mentioned, a "true-up" of advance tax payments is due by 20 December of each year based on actual income generated in the year. If the corporate income tax actually due for a year exceeds the advance payments calculated during the tax period by more than 20%, the tax authorities will impose a fine of 40% of the excess tax due over advance payments remitted. In the example, for 2009, the actual tax due was 38,400 (24,000 + 14,400); thus, advance tax payments should total at least 30,720 (38,400 x 80%). However, given the fact that advance payments total only 24,417, an additional filing and related payment should be remitted in the amount of 6,303 (30,720 – 24,417) no later than 20 December 2009. | |||||||||||||||||||||||||||||||||||||||||||
 |  | ||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||
