Investment tax preferences and businesses

Investment tax preferences and water utilities and sanitation.

 Our company has made an offer to LLP "Water-Marketing" (hereinafter Shymkent water utility), an organization of the water management system in Kazakhstan, legal support of the project, in which the planned filing in the Investment Committee of the Ministry of Industry and Trade (hereinafter referred to as the authorized body) to earn investment tax preferences.


"LLP law firm" Herman "


 A working group, which included lawyers LLC "Legal Company" German "and the leadership of the Shymkent water utility - Director General - Anarbek Orman, Deputy Director General for Economic Affairs - Alia Zheksembekova, head of the planning department - Gulsara Kaldygozova and Head of Production and Technical Department Toleubaev Altynbek . result of joint work was the conclusion of a contract with the competent authority to make investments, providing investment tax preferences.

Thus, the Shymkent water utility is the first company of the water system in Kazakhstan, to receive investment tax preferences.

The state, represented by the authorized agency, providing investment tax preferences Shymkent water utilities, create incentives that improve the quality of services. We would like to briefly tell you what it is - "the investment tax preferences."

Investment tax preferences - is targeting of benefits, which are expressed in the provision of additional deductions from the gross annual income of taxpayers making investments (all types of property other than goods intended for personal use, including items from the lease of the lease agreement, and the rights to them, invested by the investor to the charter capital of a legal entity or an increase in the fixed assets used for business) in fixed assets. Additional tax breaks for the corporate income tax, land tax and property tax are granted to taxpayers again misleading in operation in the investment project assets.

Investment tax preferences are granted for a period determined Depends on the volume of investment in fixed assets, but not more than 5 pet, the date of the application preferences set the contract concluded with the authorized body - the Committee

Investment of the Ministry of Industry and Trade, that is authority to whom the right, directly related to the negotiation and monitoring of contracts.

To provide investment tax preferences applied for the prescribed form attached documents that substantiate the estimated cost of construction, installation and acquisition costs of fixed assets used in the implementation of the project, documents establishing the sources of funding and guarantees of the investment project, a business plan, in accordance with requirements of the authorized body, as well as copies of the constituent documents.

The authorized body shall, within thirty days from the date of filing of the application shall decide on granting investment preferences, and then prepare a contract that comes into force on the date of its registration in the authorized body.

In the application of preferential corporate income tax the taxpayer is required to maintain separate accounts for the newly put into operation fixed and equal installments depending on the duration of their value preferences relates to deductions. In addition, for the duration of the contract concluded with the competent authority, the taxpayer may be exempt from paying property tax on newly put into operation under the investment program assets.

For a natural monopoly, like no one else, zazhny guarantee financing of the investment project.

As we know, the only source of funding for natural monopoly is fare (not consider activities that are not related to a natural monopoly).

Therefore, the signing of a contract for the provision of investment tax preferences depends on the coordination and approval of the competition authority of the tariff, which would allow to finance an investment project. Investments may be subjects of natural monopolies with their own and (or) the borrowing of funds. Sources of own funds are profit (net income) and depreciation.

Link to the source:

Scientific and technical journal GRP

"Water Resources and Water Use"

from "06 September 2004."