AKIPRESS.COM - Kazakhstan will accede to the Convention on Mutual Administrative Assistance in Tax Matters, The Astana Times reported.

The Mazhilis (lower chamber of Parliament) ratified the convention Dec. 11 for implementing measures related to tax agreements to counter base erosion and profit shifting (BEPS) presented by First Deputy Prime Minister and Minister of Finance Alikhan Smailov.

This convention will make amendments to all bilateral tax conventions aimed at counteracting tax evasion. In this case, the subject of the multilateral convention will be only those bilateral tax conventions, both sides of which have acceded to the multilateral convention,” he said.

The document outlines the procedure for resolving legal entities’ double residency. It supplements the preamble text eliminating the possibility of tax exemption in both nations, namely in the nation where the income is earned and the recipient’s nation of residence. The document also includes a provision that restricts applying benefits in cases where the purpose is to exclusively obtain such benefits. The requirement on dividends was included to comply with the conditions set for obtaining benefits during the year prior to the income.

The document also introduces parameters to prevent unlawfully establishing permanent status by splitting up contracts and using agency and commission agreements and special exceptions for certain types of activities.

He noted Kazakhstan adopted the convention Nov. 24, 2016 and signed it June 25, 2018. The document serves as a precondition for BEPS, a plan for implementing global tax rules to combat eroding the tax base and removing taxable profits.