An administrative claim for cancellation of the notification of elimination of violations with a moderate degree of risk identified by the state revenue authorities based on the results of desk control
Specialized Interdistrict Administrative Court of Almaty city
Almaty, Almaly district, Karasai Batyr str., 85.
The plaintiff: IP "M" represented by My P. Abdrakhimovna
IIN ...
Almaty, md...
Representative by proxy:
Law and Law Law Firm
BIN 201240021767
79 Abylai Khan Ave., office 304, Almaty
info@zakonpravo.kz / www.zakonpravo.kz
+7 708 971 78 58; +7 727 971 78 58.
The defendants:
1. Russian State Institution "Department of State Revenue for the Auezovsky district of the Department of State Revenue for the city of Almaty of the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan".
BIN 910740000113
Almaty city, Auezovsky district, Microdistrict 8, building 4A.
2. RSU Department of State Revenue for the city of Almaty of the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan"
BIN 141140001547
The city of Almaty, 132 Bogenbai Batyr Street / 110 Panfilov Street.
+7 (727) 270-07-05.
ADMINISTRATIVE CLAIM
on the cancellation of the notification on the elimination of medium-risk violations identified by the state revenue authorities based on the results of desk control
M. P. Abdrakhimovna (Hereinafter referred to as the plaintiff) is a taxpayer – an individual entrepreneur registered with the tax authority at his place of residence in the city of Almaty, and within the limits of his entrepreneurial activity he properly fulfills tax obligations.
In the taxpayer's office in the information system of the state revenue authorities, the plaintiff reviewed the posted document entitled "Notification on the elimination of violations with a medium degree of risk identified by the state Revenue authorities based on the results of desk control" No. 6003HF400156 dated 07/24/2024 (hereinafter referred to as the Notification). The notification concerns the tax period from 01.01.2023 to 31.12.2023 and contains a plot about the allegedly established fact of the sale of property with income from the increase in value during the sale of property in the absence of a submitted declaration on individual income tax or underestimation of information in such a declaration.
At the same time, the text of the Notification published in the taxpayer's office is incomplete, since it does not specify the amount of the tax liability, bank details, the requirement to fulfill the tax obligation, the specific legal basis for sending the Notification, as well as the procedure for appealing it. These details are explicitly provided for in paragraph 3 of Article 114 of the Code of the Republic of Kazakhstan "On Taxes and Other Mandatory Payments to the Budget" (hereinafter referred to as the Tax Code) for notifying the tax authority as an administrative act sent to the taxpayer, and their absence makes the Notification inconsistent with the requirements for the form and content of the tax notice.
In fact, the contents of the Notice to the plaintiff were explained verbally by telephone by employees of the State Revenue Department for the Auezovsky district of the Department of Internal Affairs of Almaty, who reported that the basis for sending the Notice was the plaintiff's sale of non-residential premises at the address: Almaty, Auezovsky district, mkr. 8, 79, n.p. 61, and alleged non-payment of property tax. income from the increase in the value of the property. In connection with the disagreement with the conclusions of the tax authority, the plaintiff, guided by subparagraph 2 of paragraph 2 of Article 96 of the Tax Code, sent a reasoned explanation to the State Revenue Department for the Auezovsky district about the absence of violations of tax legislation on her part and outlined the legal position on the disputed Notification.
In the explanation, she indicated that the disputed non-residential premises were purchased on October 2, 2006 on the basis of a purchase and sale agreement for 20,625,000 tenge. The acquisition was carried out at the expense of a bank loan secured by this property, with an annual remuneration accrual, as a result of which the actual purchase price, including credit payments, significantly exceeded the initial price (about 70,000,000 tenge). After more than sixteen years of ownership (from 02.10.2006 to 30.03.2023), the taxpayer sold this property for 48,000,000 tenge. The difference between the purchase price and the sale price would amount to 27,375,000 tenge, and even with a hypothetical occurrence of a taxable increase in value, the 10 percent rate could amount to only 2,737,500 tenge, and not 4,800,000 tenge, as erroneously stated in the notification. In addition, the property itself does not belong to the objects subject to Article 331 of the Tax Code, and was owned for significantly more than one year, as a result of which there is no taxable object.
Since, when posting the Notification in the taxpayer's office, the plaintiff was not informed of the procedure for appealing it, and the document itself did not contain an indication of the amount of the tax liability and other mandatory details, the plaintiff believed that sending appropriate written explanations within a reasonable time was a sufficient way to fulfill the Notification within the meaning of subparagraph 2 of paragraph 2 of Article 96 of the Tax Code and entails the termination of any-or the claims of the tax authority.
However, at the end of January 2026, employees of the State Revenue Department for the Auezovsky district contacted the plaintiff again and began to clarify the issue of "execution" of the Notification, actually insisting on the need to pay tax. In this regard, the plaintiff exercised her right to a pre–trial appeal and appealed to a higher authority – the Department of State Revenue for the city of Almaty - with a pre-trial complaint against the Notification in accordance with Article 91 of the Administrative Procedural Code of the Republic of Kazakhstan (hereinafter referred to as the APPC).
In the pre-trial complaint, the plaintiff indicates that the Notification does not comply with the requirements of paragraph 3 of Article 114 of the Tax Code, does not contain the amount of the tax liability, the grounds for sending it and the procedure for appealing; that the disputed non-residential premises were purchased under a purchase and sale agreement dated October 2, 2006 for 20,625,000 tenge and sold only on March 30 in 2023 for 48,000,000 tenge, that is, after 17 years of ownership; that the amount of 4,800,000 tenge was unreasonably reflected in the taxpayer's office in the column "amount of violation", whereas even a hypothetical value gain tax at a rate of 10 percent of the positive difference between the sale price and the purchase price could not have amounted to this amount; and also that the disputed property was acquired not at its own expense, but due to a bank loan, in connection with which the actual cost of acquisition, including loan payments and interest, exceeds 70,000,000 tenge and excludes the availability of real economic income from its subsequent sale.
The Department of State Revenue of Almaty city, having considered the pre-trial complaint, sent the plaintiff a response No. ZT-2026-00413492 dated 02/23/2026The Department of State Revenue of Almaty city, having considered the pre-trial complaint, sent the plaintiff a response No. ZT-2026-00413492 dated 02/23/202. In this response, the Department confirmed the fact that the disputed Notification No. 6003HF400156 dated 07/24/2024 was sent by the State Revenue Department, pointed to the legal grounds for conducting desk control and processing its results, and also referred to the provisions of Article 96 of the Tax Code on the procedure for processing violations with a high and medium degree of risk, while concluding that the Notification is considered "executed" "within the framework of subpIn this response, the Department confirmed the fact that the disputed Notification No. 6003HF400156 dated 07/24/2024 was sent by the State Revenue Department, pointed to the legal grounds for conducting desk control ocessing its results, and also referred to the provisions of Article 96 of the Tax Code on the procedure for processing violations with a high and medium degree of risk, while concludthe Notification is considered "executed" "within the framework of subparagraph 2 of paragraph 2 of Article 96 of the Tax Code" in connection with the plaintiff's submission of a response on the merits of the violations identified.
Despite the fact that the Department actually recognized the execution of the Notification and did not provide any calculations of the tax base or the amount of tax payable, the disputed Notification continues to be listed in the information system, employees of the State Revenue Department continue to refer to the need for its "execution", and the amount of the "violation" of 4,800,000 tenge is still reflected in the taxpayer's office.. These circumstances create These circumstances create legal uncertainty for the plaintiff, undermine the principle of certainty and legality of taxation, hinder the free exercise of entrepreneurial activity and carry the risk of applying measures to ensure and enforce tax obligations in the future.
The plaintiff considers the Notification, as well as the decision of the higher tax authority expressed in the Department's response, illegal and subject to cancellation on the following grounds.
Firstly, the Notification does not comply with the requirements of paragraph 3 of Article 114 of the Tax Code. The updated tax legislation explicitly stipulates that a tax notification as an administrative act must contain the taxpayer's identification number, full name, name of the tax authority, date, amount of the tax liability, necessary bank details, a requirement to fulfill the tax obligation, the basis for sending the notification and the procedure for appealing it. The absence in the disputed Notification of the amount of the tax liability, the requirements for its execution, the indication of the legal basis and the procedure for appeal makes this Notification formally and materially inconsistent with the requirements of the law and violates the plaintiff's right to receive a clear, understandable and motivated administrative act, subject to appeal in the prescribed manner.
Secondly, the controversial conclusions of the tax authority contradict the provisions of Article 331 of the Tax Code, which regulates the taxation of income from value gains in the sale of property by individuals. This rule establishes that income from value gains arises from the sale of strictly defined types of property (dwellings, country houses, garages, parking spaces, personal subsidiary facilities, etc.) that have been owned for less than one year since the date of registration of ownership. Disputed property – non-residential premises acquired by the plaintiff in 2006 and sold only in 2023, that is, 17 years later, does not fall under the list of objects specified in paragraph 1 of Article 331 of the Tax Code, and does not meet the criterion of ownership for less than one year, and therefore does not form an object of taxation on income from capital gains the cost. In its response, the tax authority did not provide a single legal norm allowing for the calculation and collection of value added tax in the described situation, and thus failed to fulfill its obligation to prove the legality of the administrative act.
Thirdly, even with a purely hypothetical assumption of the occurrence of taxable income from value gains, the amount reflected in the taxpayer's office as a "violation amount" in the amount of 4,800,000 tenge is arithmetically and legally unjustified. The purchase price of the disputed property was 20,625,000 tenge, the sale price was 48,000,000 tenge, and the possible increase in value would thus amount to 27,375,000 tenge. If the individual income tax rate of 10 percent was applied, which is provided for an individual who does not operate under a special tax regime in this case, the amount of tax on such a hypothetical income would be 2,737,500 tenge, but not 4,800,000 tenge. The tax authority did not provide any methodology for calculating the amount of 4,800,000 tenge, did not indicate which norms of the Tax Code were applied in determining the tax base and rate, and thus violated the principles of legality and certainty of taxation enshrined in the Tax Code.
Fourthly, the disputed property was acquired by the plaintiff not at his own expense, but at the expense of borrowed funds from a bank loan received under the credit line of Halyk Bank of Kazakhstan JSC for the purpose of purchasing commercial real estate for a period of 10 years with an interest rate of 12 percent per annum. In the period from 2006 to 2016, the plaintiff repaid the loan body and significant amounts of remuneration, taking into account changes in the US dollar exchange rate, as a result of which the actual cost of acquiring property, taking into account all loan obligations and overpayments, confirmed by the loan repayment schedule, exceeds 70,000,000 tenge. In such circumstances, the tax authority's claim that the plaintiff has received economic income in the form of an increase in the value of property is unreasonable and does not reflect the real economic consequences of the transaction, contradicts the basic tax principle of taxation of real rather than nominal income, and violates the principle of fair taxation.
Fifth, in accordance with Article 94 of the Tax Code, desk control is a control carried out by tax authorities based on an analysis of tax reports and information from authorized bodies, and the purpose of desk control according to paragraph 2 of this article is to grant the taxpayer the right to independently eliminate identified violations by reporting or paying taxes. Article 96 of the Tax Code establishes that the execution of a notification on the elimination of violations detected during desk control is either the elimination of detected violations or the submission by the taxpayer of reasoned explanations confirming the absence of violations. Given that the plaintiff submitted detailed written explanations within the prescribed period with legal and factual arguments for the absence of violations, the disputed Notification was subject to recognition as fulfilled, and could not serve as a basis for further demands for "fulfillment" and the actual imposition of an obligation to pay a non-existent tax.
Finally, by virtue of the CPA, any administrative act must be lawful, justified and motivated, contain references to the applicable legal norms and the factual circumstances that served as the basis for its adoption, and the burden of proving the legality of an administrative act in a court dispute rests with the administrative authority. The notification does not contain proper legal and computational justifications, and the Department's response was limited to a general excerpt from the Tax Code on the purposes of desk control without a specific analysis of the legal nature of the disputed income, the object of taxation, the tax base and the rights of the plaintiff, which together indicates the illegality of the contested administrative acts.
Thus, the disputed Notification and the subsequent decision of the Department of State Revenue for the city of Almaty, expressed in the response to the pre-trial complaint, do not comply with the requirements of the Tax Code and the APPC, violate the rights and legitimate interests of the plaintiff as a taxpayer and are subject to recognition as illegal and judicial cancellation.
In accordance with part 1 of Article 156 of the CPC, if a claim challenging an onerous administrative act affecting the rights, freedoms and legitimate interests of the plaintiff is justified and the court recognizes its illegality, it cancels it in whole or in any part.
Based on the above, guided by the Tax Code of the Republic of Kazakhstan, the Administrative Procedural Procedure Code of the Republic of Kazakhstan, within the time period established by Articles 84 and 122 of the CPC,
I ASK THE COURT:
· Cancel the notification of the State Revenue Agency for the Auezovsky District of the Department of State Revenue for the City of Almaty of the Department of State Revenue of the Ministry of Finance of the Republic of Kazakhstan No. 6003HF400156 dated 07/24/2024 on the elimination of medium-risk violations identified by the state revenue authorities based on the results of desk control.
· To cancel the Administrative Act No. ZT-2026-00413492 of the Department of State Revenue for the city of Almaty dated 02/23/2026.
· To collect from the State Revenue Administration of the Auezovsky district of the City of Almaty in favor of My P. Abdrakhimovna the costs of paying the state duty in the amount of 2,595 tenge.
With respect,
Representative by proxy: Kenesbek I.M.
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