BUSINESSMEN MAY RECOVER COSTS OF STAFF TRAINING AND PRODUCTION MODERNIZATION
How can an entrepreneur recover funds spent on production modernization or staff training? Who can apply for a refund? The representative of the Kazakhstan Industry Development Institute (KIDI) told about the measures of state support of Kazakhstan enterprises. KIDI is a developer and operator of the program aimed at increasing labor productivity.
1. What document regulates the receipt of state support?
- Order of the Minister for Investments and Development of the Republic of Kazakhstan dated December 9, 2015 No. 1194 “On approval of the Rules for the provision of state support to subjects of industrial and innovative activity aimed at increasing labor productivity and development of territorial clusters” (hereinafter referred to as the Rules)
2. Who and when can submit the application?
Applications for state support measures are accepted by the national institute on a constant basis, year-round. The companies working in the industrial sector are allowed to submit application for support. KIDI receive the documents of the companies:
1. operating in priority sectors of the economy in accordance with the List, in accordance with Appendix 1 to the Rules;
2. working at least one calendar year before date of receipt of the application by KIDI , i.e. one year should have passed from the date of registration and / or notification of a company in the justice authorities.
3. What documents need to be filed for cost recovery?
The list of documents is provided in paragraphs 28-31 of the Rules (depending on the types of costs)
4. Whether costs of equipment purchase are compensated?
No, they aren’t. The costs incurred in the provision (execution) of the involved contractor of services (works) are subject to compensation. The cost of purchasing goods is not reimbursed.
5. Is it possible to recover the costs incurred during the certification of goods?
No, it isn’t. This type of cost is not provided by the Rules.
6. Can an individual be a performer?
No, he/she can’t. According to subparagraph 17 of paragraph 6 of the Rules, the performer is an individual entrepreneur or a legal entity providing services (performing work) to the applicant, or a recruited foreign worker, within the framework of the Rules.
7. The maximum amount to be reimbursed is 60 million tenge - is this for one applicant or for all applications?
Reasonable and documentary confirmed costs incurred not earlier than 24 months prior to the filing date of the application are reimbursed in the amount of 40 per cent of the costs incurred. One Applicant can receive a reimbursement of the costs incurred in the amount of 60 million tenge for each measure of state support (except for reimbursement of expenses for improving the competence of an employee - 30 million tenge). Thus, under the Rules, each Applicant has the opportunity to receive a total refund on all support measures up to 210 million tenge in one calendar year.
8. Can subsoil users get support under the Rules?
Within the framework of the Rules in the sector of the mining industry, Applicants may be individual entrepreneurs and / or legal entities carrying out activities related to technical services and technical support in the industry (code 09).
9. Terms of consideration of the application.
In accordance with the Rules, the applicant receives a notice of conformity or non-compliance with the requirements of the Rules (with justification) no later than 11 business day after the day of registration of the application at KIDI.
10. What is the difference between mounting supervision and installation of equipment when applying for cost recovery?
According to subparagraph 3 of paragraph 6 of the Rules, installation of equipment is an assembly, installation in a design position and permanent attachment of equipment with attachment of control and automation equipment to it, as well as communications ensuring the supply of raw materials, water, steam, energy, etc. and waste disposal.
At the same time, according to sub-clause 4 of clause 6 of the Rules, mounting supervision of equipment is the technical guidance for equipment installation carried out by the manufacturer of this equipment or the contractor-supplier of equipment.
At the same time, when reimbursing the cost of mounting supervision of equipment, in addition to a copy of the equipment installation contract, you must provide copies of the equipment supply contract or documents of the manufacturing company.
11. Which personnel training is eligible for reimbursement?
In accordance with sub-clause 1 of clause 12 of the Rules, reimbursement of expenses is made through professional training and / or retraining and / or advanced training of engineering and technical personnel, production personnel, including top managers. At the same time, according to sub-clause 22 of clause 6 of the Rules, a top manager is the head of a legal entity or a member of its executive body or the head of a business unit for the production and / or promotion of manufactured products / services, with the exception of a financial (accounting) department, administrative or legal unit.
12. In 2017 our company signed a contract with an Italian company for the manufacture and supply of equipment. Services for installation and commissioning of this equipment were included in the cost of equipment. At the same time, the amounts of installation and commissioning were not singled out separately in the Contract, and only the total value of the Contract is indicated. Can our company apply for reimbursement of expenses for installation and commissioning of purchased equipment?
Due to the fact that it will not be possible to establish a specific amount of costs for installation and commissioning of the purchased equipment, reimbursement of costs under such a contract will not be possible.
13. Is it possible to recover the cost of service?
No, it isn’t. Under the Rules the reimbursement of service costs is not provided.
14. Is it possible to recover costs when the contractor involved in the provision of services is a non-resident?
Yes, it is possible. In this case, it will be necessary to provide a document confirming the registration of such a legal entity.
15. Is it necessary to notarize the translation of documents from a foreign language into the state or Russian language?
No, it isn’t. In accordance with the Rules, the application and the documents attached thereto are drawn up in the state and / or Russian languages. In case of submitting a copy of the document in a foreign language, the applicant shall ensure its translation into the state and / or Russian languages. At the same time, the application and the attached materials are certified by the list of the head of the company or the person performing his duties (if there is a confirming document on the performance of the duties of the head), or an individual entrepreneur or person authorized by them (if there is a power of attorney) or an individual.
16. Is there reimbursement of costs for attracting a foreign worker?
Yes, it is. In accordance with the Rules, compensation of expenses is possible on involvement of the foreign worker under the employment contract for the purpose of the improvement of technological process and/or increase in efficiency of the organization of production provided respectively by Subparagraphs 3) and 4), respectively paragraph 12 of the Rules, and / or the introduction of technologies (elements) Industry 4.0. The foreign worker at the time of the conclusion of the employment contract must have:
1. technical and vocational education or higher education, or postgraduate education;
2. experience of at least five years in the field of services provided (work performed) outside the territory of the Republic of Kazakhstan.
17. Is it possible to submit an application in electronic form?
At present, the acceptance of the application and the documents attached to it is carried out in paper form in accordance with the requirements of the Rules. At the same time, the work is currently underway to develop an appropriate information system for receiving applications, upon completion of which the application and the attached documents will be provided exclusively through the web portal (the applicant must submit an electronic application and an electronic package of documents provided for in paragraphs 29, 30 and 31 of these Rules depending on the types of costs). Reception of applications in electronic form is planned for the current year.
18. What obligations does the applicant have after receiving state support?
In accordance with the Rules, in order to carry out monitoring, the national institute requests data from applicants to form a report on the implementation. The applicant undertakes to provide KIDI with the necessary data to conduct monitoring at his written request within the prescribed time, and also to reach the target indicator of state support measures - an increase in the enterprise’s income not less than 2 (two) tenge from the state-invested 1 (one) tenge within the Rules. In addition, the applicant undertakes to ensure the return of the funds received as state support, in case of violation of terms of the Cost Recovery Agreement, unless the applicant has not reached the specified target indicator.