Tashkent, Uzbekistan (UzDaily.com) -- From 1 September 2020, a new procedure for collecting tax arrears, recognized as hopeless, has been introduced. This innovation is established by the "Regulations on the procedure for writing off tax arrears recognized as uncollectible", registered by the Ministry of Justice under No. 3256 from 30 June 2020.

The current procedure for writing off tax arrears recognized as uncollectible has been developed in accordance with the Tax Code in the new edition and has completely incorporated new norms and concepts.

The document is fundamentally different from the previous one:

- the criteria for writing off bad tax arrears have been concretized and refined;

- a procedure has been established for writing off bad tax arrears of foreign legal entities, permanent institutions and legal entities - non-residents of the Republic of Uzbekistan;

- the number of documents required to write off the collection of bad tax arrears has been reduced;

- the competent authority that makes the decision has been determined (these are the tax authorities at the location of the legal entity or the place of residence of the individual, as well as tax authorities at the place of registration of the taxpayer or tax agent).

Tax debt of individuals is recognized as hopeless for collection when:

- declaration of bankruptcy of an individual entrepreneur - in case of non-payment of tax debt (its part) due to insufficient property of the debtor;

- the death of a natural person or the declaration of a natural person as deceased - due to the insufficiency of his property, including in the case of the transfer of inheritance into state ownership;

- the absence of heirs of a deceased individual or if the heir (s) refuses the right to inherit;

Tax debt of legal entities is recognized as hopeless for collection when:

- liquidation of a legal entity - due to insufficient property of a legal entity and (or) the impossibility of its repayment by the founders of this legal entity within the limits and in the manner prescribed by law (in the manner prescribed by Article 91 of the Tax Code);

- by a court decision on the loss by the tax authority of the possibility of collecting tax arrears in connection with the expiration of the established period for its collection or a court ruling on refusal to restore the missed deadline for filing an application for collection of tax arrears;

- deregistration of a foreign legal entity with a tax authority in case of non-payment of tax arrears due to insufficient property of a permanent establishment and the impossibility of its repayment by a legal entity - a non-resident of the Republic of Uzbekistan. After the tax debt is recognized as hopeless, the tax debt is subject to recovery upon re-registration of foreign legal entities with the tax authority or the restoration of their activities.

When writing off a tax debt recognized as uncollectible, payment of excess payments is not allowed. Penalties and fines that are charged on the tax debt of an individual, recognized as uncollectible, or directed to collection from the heir, are recognized as hopeless to be collected and written off.