Tax audit by tax authorities

Tax audit by tax authorities is performed in the form of desk audit, on-site audit and comprehensive audit.

The auditable period cannot extend beyond previous 3 years. Tax authorities do not have the right to conduct a new audit on the same subject for a previously audited period and to request documents previously submitted by the taxpayer.

Desk audit is the inspection of taxpayer's financial reports, tax returns and other documents available to tax authority, during which taxpayer might be required to provide justifications on the submitted tax returns or to introduce corrections thereto.

On-site audit is the on-site inspection of taxpayer's accounting policy, movement of inventory and cash, operation of cash register, etc. On-site audit should not extend for more than 10 days.

Comprehensive audit is a full-scaled inspection of calculation and payment of taxes by taxpayer. Normally, taxpayer should be notified of the commencement of comprehensive audit 30 days in advance. Comprehensive audit should be carried out within 30 days, unless extended on reasonable grounds for up to 6 months.

On-site audit and comprehensive audit shall be carried out with notification of the Commissioner for Protection of Rights and Legitimate Interests of Entrepreneurs under the President of Uzbekistan (biznesvakil.uz).

Desk audit

A desk audit is conducted by a tax authority based on submitted tax reports, financial reports as well as other documents and information available to the tax authority.

A desk audit is conducted on the basis of an order from the head (deputy head) of the tax authority. The order shall specify the taxpayer, the auditors, the audit deadline, the audit period, and the types of taxes being audited.

During a desk audit, the tax authority may request from the taxpayer accounting documents, explanations to the submitted tax reports, as well as other information related to the calculation and payment of taxes. The requested documents and explanations must be provided to the tax authority within 5 days from the date of receipt of the relevant request.

A desk audit may be conducted with the inspection of the taxpayer’s territories and premises during 1 working day.

On-site tax audit

During an on-site tax audit, an analysis of accounting documentation, movement of inventory and cash, verification of the use of cash register equipment and payment terminals, and test purchases shall be carried out.

An on-site tax audit is conducted following an order from the head (deputy head) of the tax authority. The order shall specify the taxpayer, the auditors, the timing and purpose of the audit.

An on-site tax audit is conducted within a period of no more than 10 days. The day when an on-site tax audit report is delivered to the taxpayer shall signify the end of the on-site tax audit.

Inspection of territories and premises shall be carried out with video recording, and if this is not possible, with the participation of witnesses.

A taxpayer has the right to refuse the inspectors of the tax authority into its territory in the following cases:

• the order to conduct an audit does not comply with the legal requirements
• the audit has not been agreed with the Commissioner for Protection of Rights and Legitimate Interests of Entrepreneurs under the President of Uzbekistan
• the inspectors do not have the identification documents authorizing them to inspect the activities of the taxpayer

Comprehensive tax audit

A comprehensive tax audit is the examination of the correctness of the calculation and payment of taxes and fees for a certain period. A comprehensive audit may be carried out in relation to a taxpayer belonging to the category of taxpayers with a high degree of risk.

A comprehensive audit may only cover the period following the last tax audit, but not more than the preceding 3 years.

Tax authorities shall send a notice to the taxpayer no less than 30 calendar days before the start of the comprehensive audit. The notice shall indicate the starting date of the comprehensive audit, the list of issues to be checked, and a preliminary list of required documents.

As a rule, a comprehensive audit cannot last more than 30 days. The audit period begins on the day the order for the comprehensive audit is handed over to the taxpayer. The duration of the audit may be extended up to 2 months, and in exceptional cases up to 3 months.

Inspection of territories and premises, as well as documents and objects, shall be carried out with video recording, and if this is not possible, with the participation of witnesses.

The taxpayer shall be required to confirm with a signature the receipt of a comprehensive audit report. The taxpayer's signature on the audit report shall not mean its agreement with the results of the tax audit.

Rights and obligations of a taxpayer

The taxpayer has the following rights:

• be present during an on-site tax audit and comprehensive audit conducted on the territory of the taxpayer
• get acquainted with the materials of the on-site tax audit and comprehensive audit, as well as receive the reports of these audits
• do not comply with the instructions of tax authorities and their officials that do not comply with tax legislation
• appeal decisions of tax authorities, as well as actions (inaction) of their officials
• demand compensation for damages caused by illegal decisions of tax authorities or illegal actions (inaction) of their officials

Taxpayers are required to:

• appear at the tax authority upon the receipt of a summons to provide documents or explanations
• when selling goods and services, provide a purchaser with checks or other equivalent documents
• ensure access of tax officials conducting tax audits to review documents that serve as the basis for calculating and paying taxes
• comply with the lawful instructions of tax authorities, do not interfere with the lawful activities of the tax authorities and officials
• ensure the safety of tax reports and other documents necessary for the calculation and payment of taxes for 3 years

Rights and obligations of tax authority

Tax authorities have the right to:

• require the taxpayer to submit documents and information necessary for the calculation and payment of taxes and fees
• conduct tax audits and other tax control measures in accordance with the established procedure
• inspect the territory, production, warehouse, trade and other premises of the taxpayer used to generate income
• to carry out an inventory of property
• seal cash registers and storage areas for inventory items and documents for a period of no more than 2 days (for a period of more than 2 days with a court order)
• take photos and videos, receive explanations and other information
• independently determine the amount of taxes in cases of loss or destruction of accounting documentation by a taxpayer
• take measures for the collection of taxes
• review cases of tax offense and apply financial sanctions
• bring claims against taxpayers in court to confiscate illegally obtained funds
• demand translation of documents to Uzbek language
• summon taxpayers to tax authorities on the basis of a written notice to provide explanations in connection with the payment (withholding and transfer) of taxes
• suspend transactions on taxpayer's bank accounts and seize its property in accordance with the law

Tax authorities are obliged to:

• inform taxpayers of their rights and obligations during tax audits, as well as inform them of the results of the audits
• inspect reports and other information about violations of tax laws
• maintain confidentiality of tax information