Case Study: Obtaining Bin In Kazakhstan.

Background facts

 

The company, which is a large US investment fund, is a client of Unicase. In the course of carrying out its activities, the entity was forcedly liquidated by a Court decision and was automatically deprived of the BIN. The client faced the following question:

 

What obligations does a non-resident legal entity have in connection with obtaining a BIN?

 

Practical aspects

 

In this case, the Client’s organization was forcedly liquidated for the following reasons: the legal entity did not provide tax reporting forms, did not perform import-export operations, did not make transfers and payments on bank accounts, was not registered as a payer of value added tax. In its Decision, the Court also refers to the fact that the company did not submit an application for suspension of activity, means of transport, the real estate were not registered on the following entity, also the Company is not a client of second-tier banks. In this case, the Client’s organization did not conduct any activity for 8 years, which is the basis for compulsory liquidation.

 

The circumstances of the case show that in connection with the obtaining of BIN, a legal entity is obliged to:

 

1. have an account in a second-tier bank for which cash transactions are conducted;

 

2. fulfill tax liabilities in accordance with clause 2 of Article 36 of the Code on Taxes and Other Mandatory Payments to the Budget;

 

3. Submit statistical forms to the state authorities.

 

For information

 

It is worth mentioning that BIN serves as a confirmation of the fact of registration of legal entities in Kazakhstan. This requirement applies to both resident legal entities and non-residents of the Republic of Kazakhstan.

 

BIN is assigned to foreign legal entities only if it is registered as a taxpayer in the Republic of Kazakhstan. The Code of the Republic of Kazakhstan dated December 25, 2017 No. 120-VI “On taxes and other obligatory payments to the budget” (with amendments and additions as of 10.01.2020) establishes the following grounds for such registration:

 

1) Activities on the territory of the Republic of Kazakhstan through a permanent establishment;

 

2) Opening a bank account in banks-residents of the Republic of Kazakhstan;

 

3) the location of the place of effective management (location of the actual governing body) of a foreign legal entity in the Republic of Kazakhstan;

 

4) acquisition (sale) of property in the Republic of Kazakhstan by a foreign legal entity that is a tax agent;5) a foreign legal entity is a party to a joint activity agreement concluded with a resident of the Republic of Kazakhstan, the activity of which leads to the formation of a permanent establishment (partnership agreement, consortium agreement);

Possible solutions:

 

In order to prevent a forcedly liquidation, a legal entity must timely submit tax reporting and statistical forms, and conduct activities in accordance with which it was registered. If the legal entity was liquidated, and one of the grounds for obtaining a BIN may be applicable, a legal entity shall submit documents for obtaining a new BIN.