Following a thematic tax audit for the period 2018-2020, the tax authority assessed an oil company with corporate income tax of 174.8 million tenge with penalties of 33.9 million tenge and VAT of 81.4 million tenge with penalties of 10.9 million tenge. The basis for the assessments was the exclusion from deductions of expenses and VAT on mutual settlements with transport contractors totaling 874 million tenge, whom the tax authority considered unscrupulous suppliers.
We achieved complete cancellation of tax assessments at the Ministry of Finance. The appeals commission supported our position after conducting a large-scale thematic audit with multiple cross-checks of all disputed counterparties. Actual mutual settlements were confirmed with transport companies for oil transportation and individual entrepreneurs for road snow clearing to ensure uninterrupted raw material transportation.
The key success factor was comprehensive verification of the entire service provider chain. Cross-checks of transport companies and individual entrepreneurs fully confirmed the reality of services provided, the presence of necessary documents (contracts, cargo waybills, oil acceptance acts, route sheets, driver's licenses, certificates for dangerous goods transportation) and the economic validity of expenses. This case demonstrates the importance of thorough documentary preparation and proof of the reality of business operations in the oil and gas industry.
