Further update on Kazakhstan withholding tax
Nostrum Oil & Gas PLC announced that its principal operating subsidiary, Zhaikmunai LLP, had its appeal rejected by the Kazakhstan Ministry of Finance Appeal Board regarding tax claims for 2018 and 2019. Zhaikmunai LLP believes the Appeal Board should have awaited the outcome of a mutual agreement procedure initiated by Dutch tax authorities. The company maintains that the tax claims, which deny exemptions from withholding tax on bonds, intra-group loans, and consulting services, are without merit. Zhaikmunai LLP is now appealing these decisions to the first instance courts of Kazakhstan and is considering treaty-based options.
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Nostrum Oil & Gas PLC (LSE: NOG) (the "Company" and together with its subsidiaries, the "Group"), an independent oil and gas company engaging in the production, development and exploration of oil and gas in the pre-Caspian Basin of Western Kazakhstan, provides a further update on withholding tax disputes involving its principal operating subsidiary, Zhaikmunai LLP ("ZKM") and the tax authorities in the Republic of Kazakhstan ("RoK"), following on from its announcements on 3 February 2026 and 9 February 2026.
Today ZKM received notifications that based on the results of the meeting of the RoK Ministry of Finance Appeal Board (the "Appeal Board") held on 13 February 2026 regarding ZKM's challenge to tax claims by the RoK tax authorities resulting from their tax audits of ZKM for the years 2018 and 2019, the Appeal Board rejected ZKM's appeal of the results of those tax audits.
ZKM believes that the Appeal Board should have suspended the appeal pending the outcome of the mutual agreement procedure ("MAP") initiated by the Dutch tax authorities under the relevant double tax treaty between the Kingdom of the Netherlands and the RoK (the "RoK-NL Treaty") in respect of the pertinent claims.
As previously announced, the Company believes that the tax claims made by the RoK tax authorities resulting from their tax audits of ZKM for the years 2018, 2019 and 2020, which deny ZKM the benefit of relevant and valid exemptions from, or reductions to, withholding tax payable under RoK law on certain bonds issued by Group companies, remuneration on an intra-Group loan, and income from consulting services, respectively, are without merit.
ZKM is in the process of appealing the Appeal Board's decisions to the first instance courts of the RoK and is also considering its treaty-based options.
The Company continues to monitor developments closely and will continue to defend its interests and to assess all available legal and treaty-based remedies.
Further updates will be issued as appropriate.
Cleaned text: letterheads, contacts and legal notices removed. View the original announcement ↗ · Company filings. Not investment advice.