The Tax Planning Research Of The Kazakh Gas Pipeline Project South Line

This article briefly summarizes the tax law of Kazakhstan and compares the difference with Chinese tax laws.The author made analysis on differences between the two countries' tax systems and tax planning research on Kazakh gas pipeline project South line after in-depth study of the Kazakh tax law provisions and guidance on tax issued by China Business management agencies,and consulting Kazakhstan tax experts.Kazakhstan formed a relatively complete,western tax system since its independence.The tax burden in Kazakh tax law is lower than that defined in China,the tax system is much more reasonable,while the tax legislative process is a little bit strict.Based upon the Agreements mutually signed by China and Kazakhstan governments on avoidance of double taxation,when enterprises in Kazakhstan incur consultative costs interest and other expenses with Chinese companies,the enterprises may apply for withholding tax relief after the residents providing identity proof issued by the Chinese tax authorities.According to Intergovernmental agreement by China and Kazakhstan on the Kazakh gas pipeline project South line,the project is exempted from Corporate Income Tax during financing repayment period.While the tax law of Kazakhstan requires only highest depreciation rate of FA,entities are free to choose the rate of depreciation within the limit.Therefore,in conformity with the Kazakhstan tax law,tax policy of the companies could be appropriately adjusted for the benefit of the joint venture.A lower depreciation rate during financing repayment period and maximum depreciation rate after the period might lead to tax deduction as much as possible.