Investor Guide to Europe 2014
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Preliminary contracts
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According to the preliminary contract, the parties undertake
to
enter into a future agreement on the transfer of property (basic
contract) under the conditions provided by the preliminary
contract. The preliminary contract shall be executed in the form
prescribed by law for the basic contract, and if the form of the ba-
sic contract is not stipulated, it is to be executed in writing. Failure
to comply with the rules on the form of the preliminary contract
shall entail its invalidity. Preliminary contract must contain condi-
tions allowing establishing the subject, as well as other significant
terms of the basic contract. A preliminary agreement shall specify
the period within which the parties undertake to conclude the
basic contract. If such term in the preliminary contract is not
specified, it is subject to the execution of a basic contract within
a year from the date of signing the preliminary contract. In cases
where a party has entered into a preliminary agreement evades
to sign the contract provided, it must compensate the other party
the losses caused by the named actions, unless otherwise provi-
ded by the Kazakhstani laws or contract. Obligations provided by
the preliminary contract shall be considered as terminated if it is
not executed before the end of the period within which the par-
ties must enter into the basic contract, either one of the parties
gives the other party an offer to execute the basic contract.
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Deed of sale
•
The deed of sale must be executed under the sale and purchase
contract, wherein one party (the seller) undertakes to transfer
property in ownership, economic or operational control of the
other party (the buyer), and the buyer agrees to take the property
(goods) and pay him an agreed sum of money (the price).
•
The agreement of sale and purchase of any real estate is the
subject to state registration.
CoMMERCIaL LEaSES
The commercial lease is regulated by the Civil Code. Under the
commercial lease agreement the lessor shall provide the lessee
with the entire enterprise as a property complex for a fee for doing
business in temporary possession and use, including the right to a
trade name and (or) the commercial designation of the authors, to
protected commercial information, as well as other facilities provided
by the contract of exclusive rights - a trademark, service mark, etc.
(complex of exclusive rights), except for those rights and obligations
which the lessor may not transfer to others.
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Duration : initial term of the lease
•
The initial term of commercial lease agreement is not specified
by the laws of Kazakhstan. We note that this issue is the subject to
the negotiations between the parties.
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Transfer of business
•
The transfer of the enterprise is carried out on the basis of trans-
fer and acceptance act. Preparation of the enterprise to the trans-
fer is the responsibility of the lessor unless otherwise provided by
a lease agreement.
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The environmental appendix
•
The law do not require such document for commercial lease.
Evo-
lution of
the rent during
the initial lease
•
Subject to the negotiations and
agreement of the parties.
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Term of the renewed lease
•
The term of the renewed lease is not specified by the law and
may be agreed by the parties.
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Rent on renewal
•
The law do not specify the issues on the rent in case f renewal of
the lease. This issues is up to the agreement of the parties.
TaX
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Direct acquisition of a property
(non-residential buildings)
•
The acquisition of a non-residential building (or part thereof) from
a seller liable to VAT is automatically subject to VAT which is levied
at the standard rate of 12% and assessed, in principle, on the
purchase price.
•
Notary’s services are the same as in the case of residential
property. The registrar fee will be in the range from 926 KZT ($ 6)
for a garage to 46,300 KZT ($ 300) for non-residential property
complexes including more than ten separate objects.
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acquisition of shares/interest in a company
holding a property
•
The sale of interest in a real estate company (shares in joint stock
company/interest in a partnership) does not result in taxable
turnover for VAT purposes.
•
Change of ownership in a company also gives rise to a registrar
fee (fee for state registration of legal entities) of 12,038 KZT ($
78), as well as the state duty and any other notary’s fees.
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asset deal vs. share deal
•
Acquisition of the shares/interest in a company may generate tax
savings in terms of VAT (in the case of non-residential premises),
but it may also have other indirect tax consequences (eg. inhe-
ritance of potential tax liabilities, no right to depreciate shares/
interest). At the same time, the future income from the sale of
shares/interest in a company (capital gain) may not be subject to
income tax in Kazakhstan provided that:
- the seller holds the shares/interest for more than 3 years,
- the company is not a subsoil user and does not own (directly
or indirectly) shares/interest in entities which are subsoil users,
- the seller is not registered in a jurisdiction with preferential
taxation.
All amounts are effective as of 1 January 2014 (1 monthly calculation index = 1,852 KZT, $ 1 = 155
KZT).
