State revenue authorities have identified 263 legal entities that used the company reorganisation procedure to obtain an unjustified tax advantage on value added tax (VAT). The total amount of excess VAT amounted to 31.7 billion tenge.
HOW THE SCHEME WORKED
Business reorganisation is typically used to expand operations, optimise processes, or merge or acquire companies. However, according to the State Revenue Committee (SRC), in recent years there has been an increase in cases where this procedure has been used to evade tax obligations, including VAT.
The SRC reported that during inspections, 263 companies were identified that had used excess VAT during reorganisation. In accordance with the provisions of the Tax Code, these amounts were written off. As a result, 3 billion tenge was paid into the budget, and the excess VAT was reduced by 20 billion tenge.
WHAT THE COURTS DECIDED
The legality of the actions taken by the state revenue authorities has been upheld by court practice. As the SRC clarified, appeal courts reviewed more than 10 cases related to such schemes.
In all instances, the rulings were made in favour of the state revenue authorities.
WHAT CHANGES WERE MADE TO THE TAX CODE
From 1 January 2026, the reorganisation procedure will only be carried out following tax administration.
The new rules stipulate:
- conducting desk-based control when applying the simplified procedure for fulfilling a tax obligation;
- conducting a tax audit in all other cases.
The simplified procedure is permitted subject to a number of conditions. These include not being registered as a VAT payer during the statute of limitations period, having insignificant turnover volumes, and having no tax arrears or other risk factors.
HOW EXCESS VAT WILL BE CHECKED
The new provisions are enshrined in the Rules for Fulfilling Tax Obligations during Reorganisation, approved by Order No. 654 dated 31 October 2025 "On certain issues of fulfilling tax obligations during liquidation, reorganisation, and cessation of activities by taxpayers."
Furthermore, excess VAT exceeding 300 times the monthly calculation index (MCI) can now only be transferred to a legal successor after the accuracy of these amounts has been confirmed through a comprehensive tax audit.