Tax offenses and liability

If a taxpayer carries out transactions or sequences of transactions, the purpose of which is to obtain unjustified tax benefit such as non-payment or reduction of taxes to be paid, such actions shall be recognized as the abuse of rights.

In case of the abuse of rights, tax authorities shall be entitled to apply necessary measures to eliminate the consequences of the abuse of rights, if disagreed by the taxpayer then appeal to a court.

Financial sanctions for tax offense

Failure to register as a taxpayer of value added tax, when required, shall entail the imposition of fine in the amount of 5% of the income earned, but not less than 5 million Uzbek soums.

Engaging in business which gives rise to a permanent establishment in Uzbekistan by a foreign entity without due registration as a taxpayer shall entail the imposition of fine in the amount of 10% of the income earned, but not less than 10 million Uzbek soums.

Failure to file tax returns in due dates shall entail the imposition of fine in the amount of 1% of unpaid tax for each day of delay, but not more than 10% thereof in total.

Concealing (understatement) of the tax base shall entail the imposition of fine in the amount of 20% of the concealed (understated) tax base.

Non-payment or incomplete payment of the tax due as a result of inaccurate calculation of tax liability or other illegal actions, unless qualified as another tax offense, shall entail the imposition of fine in the amount of 20% of the unpaid tax.

Non-payment or incomplete payment of the tax due as a result of application of transfer pricing rules shall entail the imposition of fine in the amount of 40% of the unpaid tax.

Laws of Uzbekistan regulate other types of tax offense as well.

Administrative and criminal liability for tax offense

The executive officer of a business entity may be brought to administrative or criminal liability for the tax offense committed by the business entity. The application of financial sanctions to an organization does not exempt its executive officer from administrative or criminal liability.

Administrative liability may be administered for failure to comply with the mandatory registration of a lease agreement with state tax authorities, evasion of taxes or other mandatory payments, and violation of the procedure for conducting cash transactions.

Criminal liability may be applied for evasion of taxes or other mandatory payments in large and extra-large amounts.

Administrative or criminal liability also arises on other grounds provided for by law.

Suspension of bank accounts

Taxpayer's bank accounts shall be suspended at the request of tax authority in the following cases:

• taxpayer's failure to submit financial reports and/or tax returns more than 10 days late after a reporting due date
• taxpayer's failure to provide explanations, corrections and/or documents in response to tax authority's request
• obstructing access to territories and premises (other than residential premises) for tax authority officials conducting tax audit
• absence of taxpayer at its registered address

Decision to suspend taxpayer's bank accounts can be made by tax authority for a period not exceeding 10 days. Decision to suspend bank accounts for more than 10 days shall be made by a court.