VAT Refund in Kazakhstan

VAT refund (VAT reimbursement) is the procedure for recovering from the state budget the amount of tax exceeding a taxpayer’s VAT liabilities.

In business practice, the term “VAT refund” is commonly used; however, from a legal perspective, it refers to the statutory mechanism of VAT reimbursement regulated by the tax legislation of the Republic of Kazakhstan.

The right to VAT reimbursement arises, in particular, in cases of export transactions subject to the 0% VAT rate, as well as where substantial amounts of input VAT are generated in connection with import, investment, or infrastructure projects. The procedure is typically accompanied by desk (cameral) tax control, supply chain analysis, and verification of the accuracy and reliability of submitted data.

Practice shows that denial of VAT reimbursement is often linked not only to formal deficiencies, but also to the tax authorities’ assessment of the substance of business transactions, counterparties’ tax risks, and the sufficiency of the evidentiary framework. Where a denial decision is issued, the taxpayer is entitled to initiate a pre-trial (administrative) appeal procedure or to defend its rights before the courts.

ERNST & PARTNERS has established a strong track record in handling complex VAT reimbursement projects, including high-value cases subject to enhanced tax scrutiny. We develop a defense strategy at the document preparation stage, build a robust evidentiary position, and represent our clients before tax authorities and in court proceedings. This approach enables us to minimize regulatory risks and ensure the legal sustainability of our clients’ businesses.

Our Legal Services in VAT Refund Matters

1. Preparation for VAT Refund Procedure

Legal assessment of VAT refund prospects
Tax risk analysis and supply chain review
Preliminary audit of primary (supporting) documentation
Development of VAT refund strategy and legal position
Advisory on proper accounting treatment and reporting of transactions

Legal support for VAT refunds related to export operations (0% VAT rate)
VAT recovery in import and investment projects
Legal support for subsoil users and large infrastructure projects
Structuring of tax models to minimize risks in future VAT refund claims

4. Complex and Special Projects

3. Challenging VAT Refund Denial

Legal analysis of the tax authority’s decision
Preparation of objections and pre-trial (administrative) appeals
Representation before higher tax authorities
Judicial challenge of VAT refund denial and additional assessments
Protection of the client’s interests at all stages of court proceedings

2. Support During Desk (Cameral) Tax Audit

Preparation and structuring of supporting documentation package
Assistance with filing the tax declaration
Preparation of responses to tax authority notices and requests
Representation in interactions with the State Revenue Committee (SRC)
Minimization of risks of additional tax assessments and adjustments

Legal Support for Businesses
VAT refund (VAT reimbursement) is the return of excess input VAT from the state budget to a taxpayer.
This usually arises in cases where:

The company carries out export operations subject to 0% VAT;
Input VAT significantly exceeds output VAT;
The taxpayer has overpaid VAT;
VAT was incorrectly denied for deduction by the tax authorities.

In practice, VAT refund procedures in Kazakhstan are frequently accompanied by in-depth tax audits and additional scrutiny from the tax authorities.

Overview

Practice

Key Areas of Practice

VAT reimbursement related to export transactions (0% VAT rate)
Legal support for VAT refunds in import of goods and equipment
VAT recovery within investment and infrastructure projects
Legal support for subsoil users and manufacturing companies
Defense in cases involving enhanced tax scrutiny and supply chain analysis
Challenging VAT refund denials
Litigation in disputes concerning additional VAT assessments

Our VAT reimbursement practice spans diverse industries and business structures. We advise on routine refund procedures as well as complex, high-exposure cases involving intensified tax control and disputes with the tax authorities.

Representative Experience

Challenging Tax Notifications Following Desk Audit

Representation of a company in a tax dispute involving the challenge of tax notifications on adjustment of VAT deductions and VAT offsets in excess of KZT 155 million, related to claims against a counterparty whose state registration had been declared invalid.
As a result, the company’s legal position was upheld and the tax authority’s notifications were declared unlawful.

VAT Refund of KZT 861 Million (Supreme Court)

Representation of a company in a dispute concerning the refund of KZT 861 million in overpaid VAT from the state budget.
The tax authority denied the refund based on the conclusions of the tax risk management system. The Supreme Court declared the tax authority’s findings unlawful and confirmed the company’s right to full VAT reimbursement.

VAT Refund of KZT 150 Million (Supreme Court)

Legal support in a tax dispute concerning the recovery of KZT 150 million in VAT from the state budget. The tax authority denied the refund referring to the tax risk management system.
The court upheld the taxpayer’s position and ordered full VAT reimbursement.

Dispute on Additional VAT Assessments and Loss Adjustments

Representation of a company in a dispute concerning additional VAT assessments of KZT 113 million (including penalties) and reduction of tax losses by KZT 9 billion.
As a result of the proceedings, additional VAT assessments amounting to KZT 86 million were cancelled and tax losses of KZT 941 million were reinstated.

VAT Refund on Export Transactions

Legal support of a VAT reimbursement procedure related to export supplies subject to the 0% VAT rate during enhanced desk audit and additional document requests.
The lawful application of the 0% rate was confirmed and full VAT reimbursement was secured.

Challenging Denial Based on Supply Chain Analysis

Representation of a company in a VAT refund denial case motivated by claims against second-tier counterparties.
During the pre-trial appeal procedure, the reality of business transactions was successfully proven and the unjustified application of a risk-based approach was challenged. The denial decision was revoked.

TEAM

Aslan Yernus

Managing Partner & Attorney
Bagadat Kabiyevich

Senior Partner & Attorney
Aida Borambayeva

Advocate
Timur Nurtazayevich

Advocate

MEET THE TEAM

VAT Refund in Kazakhstan

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