Tashkent, Uzbekistan (UzDaily.com) -- The Ministry of Finance of Uzbekistan published for discussion a preliminary version of the Special Part of the Tax Code, prepared with the involvement of experts from the World Bank, the International Monetary Fund, independent international experts and experts from international auditing companies.

The draft was prepared taking into account the Concept of Improving the Tax Policy of Uzbekistan, approved by presidential decree of June 29, which envisages:

• introduction of a tax on property of legal entities, land tax and tax for the use of water resources for all business entities;
• payment by taxpayers with an annual turnover (revenue) of up to 1 billion soums, a tax with a base rate of 4% with the possibility of voluntary payment of value added tax;
• a single tax rate on personal income and the abolition of insurance contributions of citizens to the extra-budgetary Pension Fund;
• abolition of mandatory deductions to state trust funds levied on the turnover (revenue) of legal entities, etc.

The work on the General part of the Tax Code and the section on value added tax, which will be available for review until 1 December is at the final stage.

The postponement of the publication of the General Part of the Tax Code is connected with the need to study the issue of taxation of related parties. It requires special attention due to the increase in the number of such transactions in conditions of liberalization of the economy of Uzbekistan and the intensification of foreign economic activity.

In the General part, it is planned to reflect the issues of transfer pricing, including the definition of controlling foreign companies and interconnected entities, the rules of "thin capitalization", as well as the specifics of taxation of operations with securities. A separate transfer pricing bill has also been prepared.

On the basis of the revised General Part of the Tax Code, individual chapters of the Special Part will be finalized, especially in the part of transfer pricing and controlled foreign companies.

The section on value-added tax is being revised in the light of the approved Concept for Improving Tax Policy. Recall, from January 1, 2019, it is planned to transfer to the payment of generally established taxes, including VAT, enterprises with annual turnover (revenue) for the previous year more than 1 billion soums, as well as reaching the established threshold during the year.

At the same time, it is stipulated to grant the right to deduct the amount of VAT on the acquired fixed assets, construction in progress and intangible assets that are currently included in their value. In connection with the transition of many taxpayers - payers of the EPP to pay VAT, it is necessary to carefully study the provisions of the Tax Code on this issue, including the use of a simplified procedure for calculating and paying this tax, the report says.

The working group on development of the draft of the new Tax Code asks business entities and stakeholders to participate in the discussion of the draft Part. Suggestions and comments can be sent to the email address taxcode@mf.uz for generalization and subsequent discussion.

After 1 December , it is planned to organize meetings for a broad public discussion of the draft Tax Code, as well as the proposals and comments received with the involvement of national experts and experts from the international auditing companies of the Big Four.