linkage & mind kazakhstan law firm _ changes in legislation in 2011

Linkage & Mind law firm

The short review of changes in legislation of the Republic of Kazakhstan for 2011

2011

B. Changes in legislation of the

Republic of Kazakhstan

Tax legislation

Bank legislation and financing

Decriminalization of criminal

legislation

Licencing system, licensing

Custom legislation

New bills planned to acceptance in

2011

A. Changes in system of state regulation of business

State and sectoral programs

Business supporting Special projects

E-government system

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Many state programs and strategies have been put on loss in 2010 and today in republic really operate following basic programs :

SP Forced industrial–innovational developments for 2010-2014

SP “Way to Europe” for 2009-2011

SP of science development for 2007-2012

SP “Salamatty Kazakhstan” the program of public health development of the Republic of Kazakhstan for 2011-2015

Strategy plan of the development of the Republic of Kazakhstan to 2020

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Concrete sectoral programs (developments of oil and gas sector, GM branches, chemical, nuclear, pharmaceutical, machine-building, building, agrarian and industrial complexes, light industry, tourism, space, transport, electropower spheres) are already accepted within the program SP FIID for 2010-2011 – texts of programs can be found on a site www.mit.kz

The sectoral program of development of Kazakhstan maintenance in 2010-2014 in which a number of measures is provided, is accepted, including:

• Grantings of tax privileges and preferences for investors in sectors of economy of the future within the limits of 5 and 6 technological ways, the commercialization centers under the social tax and social deductions, ground and property taxes to 100 %

• Granting of tax privileges and preferences on research and development realization on corporate surtax on 150 % from expenses on introduction of results of research and development

• Prolongation of action of tax privileges under the VAT and duties after 2012 within the limits of a free warehouse (or replacement with similar mechanisms)

• Complex of tax privileges in Special Economic zones and Industrial zones• Introduction of the mechanism of the guaranteed long-term contracts (from 3 till 10 years) for investors by the state

order organization• The statement of measures and principles of responsibility of heads of state structures and national holdings and

the companies for not execution of measures on development of the Kazakhstan maintenance • Conclusion with the foreign companies with the foreign participation, carrying out activity in territory of the Republic

of Kazakhstan, agreements providing the obligations on placing on deposits in domestic banks not less of 35 % from total amounts of the rests of money on accounts of the company

• Conclusion with the companies with the foreign participation, carrying out activity in territory of the Republic of Kazakhstan and created after January, 1st, 2010, the agreement providing acceptance of the obligation on placing on the organized securities market of Kazakhstan to 20 % from total amount of issues of securities

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http://www.mit.kz/

The program of MF of the Republic of Kazakhstan «Improvement of average and large enterprises having great value

for economy of Kazakhstan »,

Provides financial improvement of enterprises – subjects of an average and large business, carrying out activity in the spheres of economy having strategic value or in priority sectors of economy, accepted obligations before financial organizations as to 1.01.2011 make or exceed 50 million US dollars and there are bases to consider that without re-structuring their execution in the future will be problematic.

Improvement tools:

- Subsidizing of % of the rate to 7 %

- A delay under taxes till 3 years

- Tax preferences

The program sum – 80 billion tenge

is calculated till 2016.

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Business supporting special projects

Business counter map 2020

Is being realized in 2011 in three ways:

1) Supporting new business ideas (subsidizing, partial warranting of

credits, service support);

2) Improvement of enterprise sector (subsidizing of %, a delay back taxes); 3) support of export oriented

manufactures (subsidizing of % on the available credits).

Budget programs for 2011-

Special economic zone

The new bill «About Special economic zones» is planned to accept in 2011,

Which provides:-Administration SEZ replacement by

management companies in form of the joint-stock company, in which the structure of shareholders

can enter private investors, state bodies …

-Tax privileges in a kind ofoutright release from CSt, НЗ, the VAT on import to Special economy

zone territory Nowadays SEZ: Astana “New City” Aktau – sea portShymkent - OntustikBorovoeПИТ (Аlmaty)

Nowadays in www.egov.kz/ system following electronic services is available to citizens and business

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A. Changes in state regulation business

E-government system

Ministry of Justice of the Republic of Kazakhstan The Comette of registration service

Delivery of inquiries on the registered rights to real estate, about absence (presence) of real estate

Delivery of inquiries on the registered legal body (branch), about participants of legal bodies, etc.

Agency of management of land resources of the Republic of Kazakhstan :

Reception by the legal body of the information inquiry on presence of certificates to land (different forms of the right)

Tax Comette of Ministry of Finance of the Republic of KazakhstanDelivery of inquiries on absence

(presence) of back taxes of the tax

bearer, granting of extracts from

personal accounts, change of the

registration data, etc.

http://www.egov.kz/

Changes in legislation of the Republic of Kazakhstan

Tax legislation

Bank legislation and

financing

Decriminalization of criminal

legislation


Custom legislation

New bills planned to

acceptance in 2011

There is no cardinal changes in 2011 – particulary there was ammendments of specifying charactere

Rates of taxes, terms of delivery of the reporting - without changes GPRS-communications with the cash registers realizing alcoholic

production are introduced There will be a reduction of the tax reporting for Individual Enterpriser

(earlier – 4 times a year, now – 2 times), and also it was considerably reduced reporting form and its content

It is planned to accept the decision about decrease in rates НДПИ

for low-profit deposits It is planned to finish procedures of signing the Agreements about

exchange and mutual granting of the information practically with

all countries with whom we have Conventions on avoidance of the double taxation

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В. Изменения в законодательстве РК

Tax legislation

А.

A number of amendments in the legislation concerning regulation of

bank activity and financial organizations in a part of minimization of risks (regarding introduction of an interdiction for intervention of banks in their operational activity of hhe affiliated and dependent financial organizations, interdiction to bank holding to own stocks of the organizations, besides included in the list established by the legislation, it will be forbidden to banks and bank holdings to take any shares, except for the financial organizations (residents and non-residents of the Republic of Kazakhstan).

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В. Changes in legislation of the Republic of Kazakhstan

Bank legislation and financing

В.Changes in the legislation

concerning mortgage lending and protection of the rights of consumers of financial services and investors are made:

• the interdiction for the extrajudicial realization of mortgaging property under certain conditiosis entered,

• the interdiction for unilateral change of conditions of contracts of a bank loan, except concrete cases which are defined in the law is entered

• the marginal level of rates of compensation under the loans which are given out by banks at a rate of no more eightfold rate of the official rate of refinancing of the National Bank, etc.) is defined

С.In 2011 the law "About project

financing and securitization" is planned to pass - the essence consists in legislative fastening of financing tools of long-term projects in which the basic source of maintenance and returning the involved means are the future monetary streams from the project. The same law will allow

to apply to concession projects conditions of project financing

Within 2010 it was widely discussed and the Law «About modification and additions in some acts of Republic Kazakhstan concerning the further humanization of the criminal legislation and strengthening of guarantees of legality in criminal trial» by which decriminalization of a considerable part of economic crimes is provided is recently signed, and some of them are excluded from legal sphere as a whole. The law optimizes sanctions for economic crimes. Imprisonment is excluded from sanctions for all economic crimes of small and average weight.

According to the law, decriminalise the crimes which are not representing to public the big danger, including in economic sphere, with their transfer in a category of administrative offenses and strengthening of administrative responsibility for their fulfillment, including by introduction administrative prejudicion, scope of application of the criminal punishments which have been not connected with imprisonment extends, the norms directed on further simplification of the pre-judicial manufacture on criminal cases, increase of its efficiency are offered.

Law РК from December, 29th, 2010 makes changes and additions to some Acts of the Republic of Kazakhstan concerning perfection of activity of law-enforcement bodies in sphere of maintenance of public safety.

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Decriminalization of criminal legislation of the Republic of Kazakhstan

In January, 2011 the new Law About the state control and supervision in Republic Kazakhstan is passed - which now is unique to regulate:

• order carrying out the checks which are carried out by bodies of control and supervision,

• an order of interaction of bodies of control and supervision at carrying out of checks of the right and a duty of checked subjects at monitoring procedure and supervision,

• measure on protection of their rights and legitimate interests, • the right and a duty of bodies of control and supervision and their officials at

carrying out of checks

Depending on degree of risk of checked subjects are refered to groups of high, average or insignificant risk and also define for them periodicity carrying out of planned checks, but not more often:

1) Once a year – at high degree of risk

2) Once every three years –at average degree of risk

3) Once every five years – at insignificant degree of risk

Conditions and an order of appointment of planned and off-schedule

сhecks are accurately defined, obligatory registration of certificates about appointment of checks, the maximum terms of checks, etc.

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In the near future the bill of the Republic of Kazakhstan "About modification and additions in some acts of the Republic of Kazakhstan concerning perfection of allowing system" will be accepted. By it cancellation is provided :

• Licensings 20 kinds, 39 subspecies and 39 subsubspecies, (from 108 kinds, 211 subspecies and 258 subsubspecies) of activity;

• Certifications 5 kinds (from 19 kinds) of activity;

• Accreditations 2 kinds (from 8 kinds) of activity;

• Deliveries of permissions of 44 kinds (from 131 kinds) of activity;

• Coordination of 134 kinds (from 184 kinds) activity;

• Other documents (the admission, certificates, the report, certificates and so forth) – 48 kinds (from 158 kinds).

Licensed kinds of activity in industrial sphere are considerably reduced, activity in sphere of technical safety in general is excluded from licensed, activity kinds in information and communication sphere, in agriculture sphere, in sphere of social services for the population, tourist activity and other wise are reduced.

The bill enters a licensing principle "by default", norms about obligatory notarial assurance of copies of documents for reception of allowing documents are excluded, having replaced with their possibility of granting of the original of documents for authenticity verification.

There are no conceptual changes in questions of reception of permissions to attraction of foreign labor. For 2011 the quota - at a rate of 0,85 % to economically active population of republic (in 2010 was – 0,75 %) has only increased in comparison with 2010.

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Transition to a visa-free regime for the countries of the Custom Unions is planned for 2011

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Custom legislation

The Contract on an order of moving by physical persons of cash money resources and (or) monetary tools through customs border of the Customs Union is ratified In January, 2011 - cash money resources or traveller's cheques for the general of the sums no more than 10 000 dollars aren't subject to customs declaring in writing. If the sum of cash makes more than 10 000 dollars it is subject to written customs declaring by giving the passenger customs declaration.

The supranational body for decision of disputes will be created in 2011 - so, Economic court of the CIS will consider all disputes arising between the countries participating in the Custom Union

By July, 1st, 2011 it is supposed to cancel custom registration of the goods which occurring from the third countries and have been let out in the free reference in Belarus, Kazakhstan and Russia and moved within territories of these states, control carrying over on external borders of Republic Kazakhstan and the Russian Federation.

Since July, 1st, 2011 on borders of Russia, Belarus and Kazakhstan customs inspection of citizens of states-members of the Custom

Union is cancelled

The documents regulating an order of information interchange in electronic form between tax departments the states-members of the Custom Union about paid sums of indirect taxes (compensation of the taxes paid at export, will occur at acknowledgement by tax department of the country of the importer of payment of indirect tax at import) and other measures of administration in order of payment of indirect taxes are specified and

prepare for acceptance

About industrial policy About bankruptcy About personal data About information and its protection About special economic zones Etc.

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New legislative projects planned to acceptance in 2011

MADINA SYPATAYEVA, LLM, MBAMANAGING PARTNER

T + 7 7272 596 260, 597 560F + 7 7272 596 260M + 7 701 522 7051E [email protected]

Thanks for your attention!

ASTANA Imanov st., 7, office 21010000, Kazakhstan

T + 7 7172 200 701, 200 703F + 7 7172 200 [email protected]

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