Appealing a tax audit: how to challenge a notice and avoid overpaying the budget

A tax audit has ended with assessments of taxes, interest and penalties in a significant amount. This is not a final verdict. Appealing a tax audit is a lawful instrument for protecting business that allows assessments to be reversed in whole or in part and collection to be suspended during the dispute. In this article we analyse what exactly to appeal, in what time frame, how to choose between the higher body and the court, and why the inspectors' procedural errors often determine the outcome of the case. The material is based on the norms of the Tax Code of Kazakhstan (НК РК, 2026 edition) and the Administrative Procedure Code (АППК РК).

What exactly is appealed: the report or the notice

This is where entrepreneurs most often get confused. The tax audit report itself cannot be appealed — it is a technical document recording the identified breaches. Under art. 170(1) of the НК РК, the report is drawn up at the completion of the audit, and the date of completion is considered the date of service of the report on the taxpayer (art. 170(3) of the НК РК).

The obligation to pay is generated by another document — the notice on the tax audit results (УРП). It is issued on the basis of the report if the audit identified breaches leading to assessment of taxes, reduction of losses or refusal of a VAT refund (art. 171(1) of the НК РК). It is precisely the notice that is subject to appeal.

Before the report the inspector is obliged to serve a preliminary report — a document on the preliminary results (art. 169(1) of the НК РК). The taxpayer is entitled to file a written objection to it within 15 working days from the day following the day of service (clause 7 of Order No. 627 of the Minister of Finance of the RK of 24.10.2025). This is the first and underestimated point of defence: a well-drafted objection to the preliminary report often removes part of the assessments before the notice is issued.

Two ways to appeal a notice: body or court

A key point that is often misunderstood. A notice on audit results can be appealed at the taxpayer's choice — either to the authorised body (the Ministry of Finance of the RK) or directly to court. This follows directly from art. 191(3) of the НК РК: filing a complaint (application) "with the authorised body or court" suspends execution of the notice in the disputed part. The conjunction "or" means an alternative, not a sequence.

This is a specific feature precisely of tax disputes following an audit. The general rule of the АППК on mandatory pre-trial procedure (art. 91(5) of the АППК; clause 14 of Normative Ruling No. 2 of the Supreme Court of the RK of 09.04.2026) applies to administrative acts in general. But for a notice on tax audit results the taxpayer retains the right to go to court directly — this is confirmed by practice.

Comparison of the deadlines and parameters of the two routes:

Important: actions and inaction of officials of the tax authority (unlawful blocking of an account, refusal to accept documents) are appealed under the general rules of the АППК (art. 200 of the НК РК). Here pre-trial procedure is mandatory: first a complaint to the administrative body, then court.

Grounds for challenge: procedure and substance

The grounds fall into two groups — procedural breaches and substantive objections to the assessments. Procedural ones often turn out to be stronger: if the procedure has been breached, the audit results may be reversed regardless of whether the tax authority is right on the merits.

Procedural grounds

Unlawful appointment of the audit. An audit is conducted only on the basis of an order (art. 153(2) of the НК РК), and its start date is considered the date of service of the order under signature (art. 162(1) of the НК РК). Failure to serve the order or the absence of grounds for an unscheduled audit casts doubt on all its results.

Breach of deadlines. The audit period specified in the order must not exceed 30 working days from the date of service, unless otherwise established by law (art. 163(1) of the НК РК). Delay without proper extension is grounds for challenge.

Going beyond the limitation period. The audited period cannot exceed the limitation period for claims (art. 152(1) of the НК РК). Assessments for periods outside this term are unlawful.

Breach of the right to object. The taxpayer must be given the opportunity to express a position on the preliminary decision (art. 73(1) of the АППК; art. 169(1) of the НК РК). If objections have been ignored or the preliminary report has not been served, this is a material breach of procedure.

Substantive grounds

Incorrect legal qualification. For example, a real transaction is deemed fictitious without a court decision. The duty to substantiate the fact of a breach and disclose the supporting circumstances lies on the tax authority (art. 30(4) of the НК РК) — not on you.

Doubts about the reality of the transaction. The tax authority often disallows VAT deductions or expenses, citing the counterparty's lack of resources. Here you need to check whether a counter-check has been conducted and to assemble primary documents: contracts, delivery notes, acts of acceptance, payment orders, correspondence confirming actual performance.

Arithmetic and factual errors. Double accounting of income, incorrect currency rates, expense documents not taken into account. Record each error in the complaint with the correct calculation.

How to file a complaint with the higher body

The complaint is filed with the authorised body within 30 working days following the day of service of the notice (art. 192(1) of the НК РК). Form — in writing: on paper, through the e-Otinish portal or the taxpayer's cabinet. Send a copy of the complaint to the state revenue body that conducted the audit.

The complaint must specify:

• name of the addressee body;
• applicant's details (for a legal entity — name, BIN, address);
• name of the auditing body;
• circumstances and arguments with references to documents and rules;
• date of signing;
• list of attachments.

The complaint is signed by the taxpayer or representative by power of attorney. Absence of a mandatory detail risks the complaint being left without consideration.

Attach to the complaint copies of: the contested notice, the audit report, your calculations, correspondence with the tax authority, primary documents, bank statements, expert opinions, representative's power of attorney.

Following consideration, the authorised body issues one of two decisions (art. 197(2) of the НК РК): to leave the notice unchanged and the complaint without satisfaction, or to reverse the notice in whole or in part.

How to challenge a notice in court

The claim is filed in the specialised inter-district administrative court (СМАС). If you have completed the pre-trial stage, the deadline is 1 month from the day of service of the decision on the complaint (art. 136(1) of the АППК). For direct application to court, the one-month period runs from the moment you learned of the breach of rights by the notice.

In the administrative court the case is initiated on the basis of a claim (art. 131(1) of the АППК). When rights have been breached by a burdensome act, you may bring a claim challenging it and seeking its full or partial reversal (art. 132 of the АППК).

The main advantage is that the burden of proof lies on the tax authority. In a claim challenging a burdensome act, the burden of proving its lawfulness lies on the respondent state body (art. 129(2) of the АППК). If the evidence is insufficient, the act is subject to reversal. The rule of interpretation also works in addition: all uncertainties of tax legislation are interpreted in favour of the taxpayer (art. 30(5) of the НК РК).

Despite the burden of proof being on the opponent, a passive position is impermissible. Prepare a structured set of documents with an inventory, and for each episode show what the tax authority asserts and why it is wrong. In complex disputes file motions for forensic accounting or appraisal expertise and for evidence to be obtained through a court request.

The case at first instance is heard by a single judge within up to 3 months. Appeal — by a panel of 3 judges, up to 2 months. Cassation at the Supreme Court is possible, but tax disputes usually conclude at appeal level.

Suspension of collection during the dispute

Filing a complaint with the authorised body or an application with the court suspends execution of the notice in the disputed part (art. 191(3) of the НК РК; art. 96(1) of the АППК). The tax authority is not entitled to demand payment or block accounts while the dispute is unresolved.

The exception is protection of citizens', legal entities', public or state interests (art. 96(1) of the АППК). On this ground the tax authority sometimes tries to start collection, citing the budget's interests. If this happens, when filing the claim seek interim measures — a prohibition on the tax authority debiting funds before the court decision. Courts grant such applications where there is a real risk of damage to the business.

Bottom line

Appealing a tax audit comes down to three decisions: correctly identifying the object (the notice, not the report), choosing the route (higher body within 30 working days or court within 1 month) and not missing the deadline. The burden of proof is on the tax authority's side, and irremovable doubts are interpreted in your favour — with proper preparation the chances are high.

If you have received a notice on audit results and doubt the validity of the assessments, book a consultation. We will conduct an audit of the report, assess the prospects and prepare a complaint or claim.

Authors

Alibayev Yerkebulan

Director

Khassanov Yerbolat

Managing partner