KMG EP: 2009-2012 Tax Audit Bill Reduced by 25bn Tenge – Further Appeals Planned

KazMunaiGas Exploration Production is pleased to announce that in accordance with a positive review of the Company’s 2009– 2012 tax audit appeal by the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan, the initial tax charge was reduced by 25bn Tenge to 13.5bn Tenge. The Company has provided for 33bn Tenge in its accounts in 2015 in relation to this specific tax claim, so this reduction will be recorded in the Company’s 2016 annual financial statements as reductions to current year Corporate income tax, Excess profit tax, Mineral extraction tax and fines and penalties in the amount of 18.8bn Tenge.

In September 2015 the Company received a tax assessment related to the 2009 – 2012 Comprehensive tax audit of 38.5bn Tenge, including the principal tax charges and penalty of 28.3bn Tenge and an administrative fine of 10.2bn Tenge. The Company disagreed with the results of the tax audit and filed an appeal against the additional tax charges to the State Revenue Committee, which recently ruled to reduce the amount of principal tax charges and fines to 11.5bn Tenge. Additionally, in accordance with the decree of the Specialized Interdistrict Administrative Court of Astana, the amount of administrative fines was reduced to 2bn Tenge. The Company intends to file a court appeal for the remaining tax claim of 13.5bn Tenge in the near future.