Match the following word combinations

To Hedge or Not to Hedge. That is the Question...

Text 9

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Put special questions to the text.

Make up sentences with the following word combinations.

Give the Definitions.

Complete the sentences.

1) The new legislation introduces a new tax - the Mineral Extraction Tax, which…2) The business community is witnessing different reactions to the changes in the economic environment…3) The excess profit tax may still apply in certain situations where sale of the subsurface…4) Current circumstances will force the subsurface user to sell…5) The additional tax opportunities may arise from proper structuring of …

Export Rent Tax, excess profit tax, investors.

Tax regime, business community, economic environment, tax opportunities, current circumstances, appropriate response, original investment, careful attention, tax saving, additional tax cost.

Most companies in Kazakhstan, as well as citizens and visitors of the country had a painful awakening on 4 February 2009, when the Kazakhstan tenge underwent a 25% devaluation overnight. There were two categories of reactions - those who did not care and those who did care. Those who did not care were people without money who had nothing to lose. Everybody else belonged to the second category, either because they had lost money overnight or because they had taken appropriate measures to protect the values (e.g. hedging transactions) ahead of time.

It is likely that the February devaluation is only one in a series of further currency moves in today's volatile economic climate. How should companies react to this? Will they be rewarded or punished by the tax law for protecting the asset values and thus also the volume of taxable profits through use of hedging tools?

The answer in the case of subsurface users is unclear. Despite the fact that hedging transactions generally fall in the privileged category of financial derivative transactions, which do not penalize hedging from a tax perspective, the new Tax Code does not seem to provide the same grace for subsurface users. An appropriate treatment for hedging operations by subsurface users remains to be determined.

The more they dive into the new Tax Code, the more readers may be puzzled. Did anybody question in the past, whether and how Kazakhstan formulates the appropriate Tax Policy? If so, there is no doubt now - Kazakhstan clearly does have a tax policy, because this is now also established by the newly introduced Article 10.

The question remains whether Kazakhstan tax payers also need to have a tax policy. The answer is yes, since this is now legislated. To guarantee that this happens, every subsurface user is obliged to submit its tax policy together with its corporate income tax return for the year 2008.

Will this create an additional burden for subsurface users? Yes, because subsurface users who did not have an existing formal tax accounting policy must now create one while at the same time struggling with preparing the 2008 tax returns and trying to understand the new challenges brought by the changes introduced by the New Tax Code.

What is the appropriate response to this last challenge? It is as simple as creating a new tax policy.

1. Find Russian equivalents for the following words:

Citizen, visitor, undergo, painful, devaluation, overnight, reward, punish, law, protect, value, guarantee, submit, corporate, challenge, additional, dive, treatment, hedging determine, measure, volatile, climate, doubt, volume, taxable.

appropriate measures	налоговая декларация
volatile climate	производные сделки
derivative transactions	налоговая политика
tax policy	соответствующие меры
tax return	неустойчивый климат

Дата добавления: 2014-10-22