The Senate at the 25th plenary meeting on Saturday approved the Amendments to the Tax Code of the Republic of Uzbekistan Bill, the upper house said.
The Bill provides for the adoption of a new version of the Tax Code and aims to reduce the tax burden on the economy, as well as eliminate imbalances in tax burden between businesses paying taxes under a simplified and generally established tax regimes.
The number of taxes is cut by unifying and combining those with similar tax base. Tax reporting is reduced and simplified, with operating costs minimized.
The new edition of the Tax Code set the rates of VAT, corporate tax, personal income tax, social tax, sales tax, corporate property tax, corporate property tax, corporate land tax, personal land tax, tax on the use of water resources, tax on the use of subsoil, the procedure for their calculation and the timilines of their payments.
Types of tax audits have been cut, and the control procedure has been simplified. From next year, the types of taxes will be reduced from 13 to 9. In particular, the unified land tax, state duty, customs payments and types of fixed tax for certain types of entrepreneurial activity have been scrapped.
A new procedure for conducting tax control has been introduced, giving the right to tax authorities to appoint desk, field audits and a tax audit based on a risk analysis without coordination with the authorized body. Taxpayers are divided into three segments based on 42 criteria - “conscientious”, “suspicious” and “regular offenders”.
The procedure for resolution of tax disputes in the pre-trial procedure is explained and liability measures are established depending on the type of tax violation.
The liability of tax authorities is being increased, a mechanism is being provided for the timely return of the excessively collected following a tax audit. A mechanism is being introduced for the timely return of the excessively paid tax and the offset (return) of the amount of excessively taxed tax.
The norms are outlined to combat tax evasion, including the rules for “re-qualification of transactions”, the abolition of “pseudo-transactions”, the non-provision of deductions for fraudulent transactions.
The norms are introduced to control transfer pricing, the definitions “related parties” and “controlled transactions between related parties”, “controlled foreign company (CFC)”, as well as the procedure for taxation of a foreign legal entity controlled by a resident taxpayer of Uzbekistan is disclosed.
The definition of “consolidated group of taxpayers” (CGT) and the features of their taxation are introduced.
“According to the Regulatory Acts Law, each document should be stated in a concise, simple and clear language. We always pay attention to this. On the other hand, the laws regulate very complex relationships. Therefore, the ways to simplify a law are limited. If you take the Tax Code - one of the main economic laws, where there are about 500 chapters. From an objective point of view, writing it in simple languages seems difficult, because there may be a different interpretation by experts. To the extent possible, the code was simplified,” said Minister of Justice, Ruslanbek Davletov.
He noted that after the adoption of the Code, the Ministry of Justice together with the Ministry of Finance, the State Tax Committee will actively carry out outreach work “using innovative mechanisms”.