Tax Alert: 30 October 2013

Amendments to number of legislative documents

By virtue of the Law of the Republic of Uzbekistan No.ЗРУ-355 of 7 October 2013 a number of amendments to the legislation were introduced.  The most notable amendments are as follows.

Tax Code

Deferral on payment of taxes, other obligatory payments and financial sanctions accrued in the result of tax audit may now be applied regardless of the amount due.  Earlier the deferral could have been applied only if the aggregate amount of such payments exceeded 20% of current assets.  Deferral is provided for a period of six month with payments of monthly equal instalments from the date of decision on collection of tax.

Frequency of the planned tax audits of the private banks and other financial institutions should not exceed one time in every five years.

Rate for calculation of the late payment interest (LPI) has been changed from 0.05% to 0.033% per day.  Change of the rate brings the Tax Code in line with the Decree of the President of the Republic of Uzbekistan #УП-4354 of 24 August 2011 which have provided for reduction in the rate.

Income of individuals paid for cotton picking is included in the list of income exempt from personal income tax.

Customs Code

Additional charge of the customs payments could be made only within one year from the date of release of goods.  Moreover, legal entities can submit written request to customs authorities to use the deferral of payment of additionally charged customs payments and financial sanctions.  Deferral is provided for the period of six month with payment by equal monthly instalments.

Administrative Code

Fines charged on individuals and authorised personnel for certain types of violations have been increased.  Moreover, quite a few articles were supplemented by provisions envisaging penalties for repeated violations in the areas of taxation, employment, antimonopoly, social protection of disabled, securities and exchange activities, licencing and many others.  Following are some examples of the amendments:

  • Maximum fine for repeated violation of the order of cash transactions and payment discipline applied to the authorised personnel has been increased from 15 to 20 minimum monthly wages (MMW).
  • Similarly, maximum fine for carrying out activity subject to licencing without licence charged on authorised personnel has been increased from 15 to 20 MMW.
  • New fine in the amount ranging from 50 to 100 MMW was introduced for production, manufacturing, purchase, storage, transportation and sale of poor quality and counterfeited drugs and other medical products.

Law on accounting

Receipts from payment terminal issued for transactions carried out using corporate plastic cards are included into the list of primary supporting documents.

Labour Code

List of individuals not subject to probation period was amended to include graduates of specialised secondary institutions, professional educational institutions and higher education institutions starting their work for the first time within three years from the graduation date.

Another change to the Labour Code provides that the total duration of unpaid leave shall not exceed three months within a twelve month period.

Interpretation of unavoidable contradictions and ambiguities

Number of legal acts has been changed to include similar provisions stating that all unavoidable contradictions and ambiguities shall be treated in favour of business entity.  In particular the following acts have been amended:

  • Law "On state control of economic entities",
  • Customs Code, and
  • The Economic Procedural Code.

Amendments to order on calculation of late payment interest

Regulation of State Tax Committee No.ПП-1724-1 of 23 September 2013 (Regulation) introduced amendments to the Order on calculation of LPI in relation to taxes and other obligatory payments.

  • The Regulation extends scope of the Order to include individuals.  Previously only legal entities were covered.
  • Base for calculation of LPI is amended to include financial sanctions in addition to taxes and other obligatory payments.
  • LPI rate has been changed to 0.033% in line with the amendment to the Tax Code.

Revised norms of allowances

By the order of the Minister of Finance #89 of 19 September 2013 registered by the Ministry of Justice under #932-2 of 23 September 2013, statutory norms of daily subsistence allowances (DSA) for business trips outside of Uzbekistan have been revised.  Examples of the amended norms are as follows:

  • DSA norm to Spain was increased from USD 35 to EUR 40.
  • DSA norm to Japan was changed from 10 000 yen to USD 100.
  • DSA norm to Russia was increased from USD 10 to USD 25 (except for Moscow and St. Petersburg where norms are USD 35).

Amendments to the currency control legislation

Following amendments were introduced to the Decree of the Cabinet of Ministers No.#245 of 29 June 2013 (Decree 245) in part related to collection of proceeds from export of goods.

Thus, foreign currency proceeds from export operations should be collected within:

  • 180 days from the actual date of export – for small business and private-entrepreneurs engaged in the export of goods in foreign currency without 100% prepayment, letter of credit or bank guarantee (export insurance policy should be available).
  • 90 days from the actual date of export – for the following state owned companies carrying out centralized export "Uzmarkazimpeks", "Uzprommashimpeks", "Markazsanoatexport", "Uzinterimpex", "Uzvneshtrans", "Urta Osiyo Trans".

If foreign currency is not collected within established terms, the exported goods should be returned to the seller.