Tashkent, Uzbekistan (UzDaily.com) -- The Ministry of Finance, together with the State Tax Committee, with the assistance of the International Monetary Fund, the World Bank, international and national experts, prepared a new version of the Tax Code.

In the presented project, in accordance with the Concept for Improving the Tax Policy of the Republic of Uzbekistan, the application of tax legislation has been simplified as much as possible. For this:

reduced number of taxes and other obligatory payments;

special tax regimes for markets, agricultural producers, law firms and firms, as well as persons performing tour and concert activities, have been canceled. The number of special tax regimes will decrease from 3 to 1;

sections regulating the payment of state duties and fees for the right to sell certain types of goods (alcohol products) have been removed from the Tax Code;

gaps in tax regulation have been eliminated, applicable terms have been more fully clarified, in connection with which the number of articles of the Tax Code has increased significantly. This will reduce the number of disputes regarding the application of tax legislation in practice.

Most of the changes in the new version of the Tax Code are aimed at strengthening the protection of the rights and legitimate interests of bona fide taxpayers. For these purposes, in particular:

“neutrality” of the impact of value added tax on the financial and economic activities of business entities was ensured by reimbursing the “negative” amount of tax from the budget, which would require additional budgetary expenses. A one-off VAT offset is also introduced when acquiring (erecting) fixed assets, including real estate. Currently, it is carried out in equal shares for consecutive 12 months, and for real estate - within 36 months;

taxpayers will be able to apply one-time depreciation deductions for the purchase of technological equipment or real estate;

certificates of advance payments on income tax are canceled. Advance payments will be calculated only by large taxpayers;

canceled the taxation of losses on the sale of goods (works, services) below cost;

the liability of tax authorities for unlawful additional taxation or the application of financial sanctions, untimely return of taxes paid excessively by business entities increases. In these cases, the budget will pay taxpayers a penalty for each day of delay.

The draft code provides a new procedure for tax control, successfully tested in world practice. For this, its forms and mechanisms have been improved. The main goal is to help conscientious taxpayers and identify entities that evade tax obligations. It is achieved by:

detailing the rights and obligations of taxpayers and tax authorities;

introducing the concept of “due diligence”, which should reduce the possibility of applying “tax schemes”;

non-application of tax control measures to taxpayers, which will be determined as bona fide based on the results of risk analysis performed by software products without the participation of an inspector;

simplification of tax control forms: cameral control, field audit and tax audit. At the same time, it is provided that penalties will be applied only based on the results of a tax audit;

establishing differentiated penalties depending on the type of tax offense.

The draft Tax Code provides tax rates for taxes, excluding excise tax, land tax and tax for the use of water resources. Rates for these types of taxes will be approved annually by the Law of the Republic of Uzbekistan “On the State Budget”.

In general, the draft new version of the Tax Code is based on proven principles and approaches to tax collection, and the best practices of other countries. In particular, the experience of the CIS countries and the European Union was used in work on it.

The adoption of the new edition of the Tax Code will make it possible to bring Uzbekistan’s tax system closer to international standards, make it easier and more understandable for national and foreign investors, while ensuring a high level of protection of the rights of law-abiding taxpayers.

The draft new Tax Code is available on the website www.regulation.gov.uz and is offered for wide discussion by entrepreneurs, lawyers, tax consultants, auditors and accountants.