Following a thematic tax audit of a quasi-governmental sector participant for 2020-2022, the tax authority assessed additional CIT of 91.8 million tenge and VAT of 53.6 million tenge with corresponding penalties. The assessments were based on the exclusion from deductions of expenses for locomotive technical maintenance and railcar wheel replacement totaling 436 million tenge. The Department deemed the transactions fictitious, citing the inclusion of counterparties in the unreliable taxpayer list after the operations were conducted.
The court of first instance fully satisfied the company's claim, establishing the actual performance of disputed contracts based on comprehensive examination of documents, witness questioning, and analysis of video materials of completed work. The key argument was the absence of final court decisions recognizing transactions as invalid, which is a mandatory condition for excluding expenses from tax deductions under Article 264 of the Tax Code. The appellate instance confirmed the validity of the first instance court's decision.
The decision is based on the principle of taxpayer good faith presumption and high evidentiary standards required from tax authorities when challenging tax deductions. This case confirms the necessity for tax authorities to strictly comply with procedural requirements during audits and establishes a high standard of proof when excluding tax deductions.
