Case study: TKL wins a tax dispute over US$ 300,000 import VAT charges for a major clothing retailer

Ravil Kassilgov, Partner

Aybek Kambaliyev, Senior Associate

Tukulov & Kassilgov Litigation

TKL has assisted a major clothing retailer in a tax dispute involving import VAT charges in the amount of 300,000 US dollars. The client has been represented by Partner Ravil Kassilgov and Senior Associate Aybek Kambaliyev.
With reference to contradicting rules of subordinate legislation, the tax authorities found that the movement of goods from the EAEU-registered head company to its branch in Kazakhstan for further sale (i.e. transfer of goods within one legal entity) was subject to import VAT.
As a result, the tax charges were imposed on the client and its bank accounts were blocked.
The first round of pre-trial appeal efforts produced mixed results: tax charges were reduced to US$ 117,000 with bank accounts remaining blocked. During the second round of pre-trial appeal (with the Tax Revenue Committee in Astana), our team convinced the tax authorities that no import VAT was applicable to such movement of goods. The legal basis for our position was the relevant provisions of the EAEU legislation and the Kazakhstan Tax Code.
Ultimately, with the legal support of TKL lawyers, the bank accounts of the client have been unblocked and the tax claims have been dismissed in full.

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