Procedure for the application of an international agreement with respect to taxation of income from providing transportation services in international shipping. Income from providing transportation services in international shipping in which the Republic of Kazakhstan is one of the parties, earned by a nonresident legal entity that has the right to apply the provisions of an international agreement, shall be exempt from taxation without the filing of a request for application of the provisions of the international agreement, on the basis of a document confirming residency, if the legal entity has a permanent establishment in the Republic of Kazakhstan that is related to this activity.
In this case the nonresident legal entity shall be required to maintain a separate record of income earned from providing transportation services in international shipping which is not subject to taxation pursuant to an international agreement and from providing transportation services on the territory of the Republic of Kazakhstan subject to taxation, and also to reflect said income in a corporate income tax return.
The total amount of taxable income indicated in a corporate income tax return shall be reduced by the amount of taxable income that is exempt from taxation pursuant to an international agreement, calculated on the basis of the separate accounting records. In the event of the unlawful application of the provisions of an international agreement, which results in nonpayment, or incomplete payment of tax to the state budget, the taxpayer shall bear liability in accordance with legislative acts of the Republic of Kazakhstan.
Income earned by a nonresident legal entity that has the right to apply the provisions of an international agreement, from the operation of means of transport in international shipping in which the Republic of Kazakhstan is one of the parties, without the creation of a permanent establishment in the Republic of Kazakhstan, shall be exempt from taxation in accordance with the procedure established under Article 198 of Tax Code. 2.7.5 Procedure for the application of an international agreement with regard to the taxation of dividends, interest, and royalties At the time that income is paid to a nonresident in the form of dividends, interest, or royalties, a tax agent shall have the right to apply the provisions of the respective international agreement without the filing by the nonresident of a request for application of the provisions of an international agreement, on the basis of a document confirming residency, if the nonresident in question is the final recipient of the income and has the right to apply the provisions of an international agreement.
A tax agent shall be required to indicate in the statement of income tax collected at the source of payment which is filed with a tax authority the amount of income paid accrued and taxes withheld in accordance with the provisions of international agreements, the income tax rates, and the names of the international agreements.
In the event of the unlawful application of the provisions of an international agreement which results in nonpayment or incomplete payment of tax to the state budget, the tax agent shall bear liability in accordance with legislative acts of the Republic of Kazakhstan. 2.7.6