KazMunaiGas Exploration Production's 2006-2008 tax charge has been reduced by Tenge5.4 billion from Tenge12.2 billion following a decision of the Supreme Court of Kazakhstan.
This amount will be recorded as other income in the company's third quarter of 2016 financial statements.
Following the 2006-2008 tax audit by the tax committee of Kazakhstan's ministry of finance in 2012, a tax charge including principal and administrative fines and late payment interest of Tenge16.9 billion was levied on KMG EP.
The company disputed the amount and filed an out of court appeal directly to ministry.
This was followed by two inspections and discussions with by the ministry of energy and in 2014 resulted in a reduction of the charge to Tenge12.2 billion.
Since that time, the company has appealed the remaining charge in courts, which has resulted a further Tenge5.4 billion reduction to Tenge6.8 billion for the period of 2006-2008.
The company expects that further benefits from this ruling will be achieved during the course of appealing the 2009-2012 tax audit.
KMG EP is currently appealing the 2009-2012 tax audit by the tax authority, which in September 2015 charged an additional Tenge18.6 billion, imposed a penalty of Tenge9.7 billion plus implemented a fine of Tenge9.3 billion.