The total annual income of a resident legal entity consists of all types of income to be received (received) them in Kazakhstan and abroad during the tax period. Main items of income – is the income from sale of goods (works, services), income from rental property, assets value gross, income from write-off of liabilities, gratuitously received property, dividends, interest, the excess of the positive net foreign exchange difference over the negative sum of the net foreign exchange difference, gains and other types of income. The total annual income of the taxpayer has to be corrected. So, for instance, out of income one excludes dividends received from a resident legal entity of the Republic of Kazakhstan, previously taken from the source of payment in Kazakhstan and some other types of income.
● taxpayer costs associated with obtaining the total annual income are to be substracted in determining taxable income, for instance the cost of bought or manufactured goods, works, services, transportation, services of utilities, amortization and repairs of fixed assets within the stated norms in groups of fixed assets, gains for the commercial loans, the cost of insurance premiums, the cost of social payments, the excess of foreign exchange difference over the positive one, costs of tax, etc. At the same time, some types of expenses are connected with substractions within the limits established by legislation – for representatives’ expenses, interest expenses, costs of tax, the cost of fixed assets (maintenance and amortization), spending on training of staff, etc.
● The deductions are produced by the taxpayer having the documents proved the costs associated with obtaining the total annual income. These expenses are to be substracted in the tax year in which they are actually happend, excluding expenses of future periods. Expenses of future periods are deductible in that tax year to which they are related.
● Taxable income has to be further corrected. In particular, the costs actually made by the taxpayer for the maintenance of objects of the social area, have to be excluded from taxable income in the range of 3 percent of taxable income.
● Loss of the enterpreneur activities – the excess deductions over corrected gross annual income which can be propogated in the tax records for the next 10 years for the payment via the taxable income of the next tax periods.
The formula calculating CIT
Determine the TAI = total annual income during the tax period
One makes a correction of TAI = TAI – correction
One calculates TI1 = TAI – Deductions
One transfers the losses: TI 2 = TI – the sum of loss
One corrects TI3 = TI – correction, but not more than 3 % of the TI1
One calculates CIT = TI1 or TI2 or TI3 x 20 % or 10%
One recalculates = CIT – advanced payments
Taxable period
● The period to be calculated for CIT – calendar year (from January 1 to December 31)
Deadlines for declaration
● CIT Declaration (form № 100) consists of a declaration and appendix to it disclosing information about the objects of taxation and objects related to the taxation of CIT, and is submitted to the tax authorities no later than 31 March of the year following by the tax reporting period. The final calculation (payment – the difference between accrued advanced payments for a tax reporting period and actually calculated corporate tax) for the tax period, the taxpayer makes no later than 10 working days after March 31.
Tax payment date
● Taxpayers pay the corporate income tax no later than 10 calendar days after the deadline set for submission of the declaration.
Checklists.
1. Who are the taxpayers and taxable items CIT?
2. How is the TI defined?
3. What organizations are non-comercial?
4. What sum of donated given property to non-comercial organizations is excluded from TI?
5. In which case, the losses are appeared?
6. How in the tax accounting the losses are propogated?
7. What are terms of payment of CIT?
8. What is the CIT rates?
9. How are advance payments of CIT determined?
10. What is the deadline for submission of the CIT declaration?
LLP «Alpha» has income of $ 25000000 tenge for the year of 2011. Expenses were 20 million tenge. In the expenses included interest expense for the intended construction of a credit loan of 2 000 000 tenge, construction works on 31.12.2011 have not yet started. What is the sum of the CIT in 2011?
The solution:
Art. 100 Art. 100 s. 7.
CIT = (25 000 000 – 20 000 000) * 20 % = 1 000 000 tenge
LLP «Vostorg» made money assistance to the kindergarten for 120000 tenge, the company also has costs of summer camp keeping in the sum of 1 250 000 million tenge, the total annual income was 25 689 000 million tenge, allowable deductions – 23 815 000 tenge. What sum can be excluded from taxable income?
The solution:
25 689 000 – 23 815 000) * 3 % = 56 220 tenge
The company «Azhar» received the 2011 taxable income of $ 2 500.0 thous. tenge, while the accountant included in allowable deductions interest expense paid during the tax period in the sum of 1 250.0 thous. tenge. Interest expense consists of 650,0 thous. tenge paid to associated companies, and the rest was paid to the Kazakhstan banks. The average annual sum of equity in the company «Arai» during this period sumed to 2 300,0 thous. tenge, and the corresponding sum on the credit loan was 46 000 thous. tenge. Are deductions properly calculated by accountant for interest? If not, then for how much one needs to make corrections over deductions for interest?
The solution:
According to art. 103 the sum of allowed deductions over payed interest to the related party is calculated on the basis of the ratio of average annual capital and average liabilities and multiplied by limit factor:
600 + ( 2300/46 000)*6*650 = 600 + (0,3* 650) = 600+195= 795 thous. tenge – the sum of allowable deductions
2500 – 1250 = 1250 * 20 % = 250 (calculated CIT)
2500 – 795 = 1705 * 20 % = 341 (corrected CIT)
CIT must be assessed additionally for the sum of 91 thous. tenge (341 – 250)
The company in 2011 had income of 20 million tenge, allowable deductions 16 mln, at the same time deduction is applied for taxes calculated during the period in the sum of 1 800 thous. tenge, with the taxes paid 1300 thous. tenge. What sum has to be corrected for the corporate income tax at a rate of 20 %?
The solution:
Correction in the sum of tenge 100000 accrual of art. 114
LLP «Dostyk» in the tax period received taxable income in the sum
