Uzbekistan’s president has signed a law aimed at reducing the regulatory burden on businesses involved in tax disputes. Under the new rules, if a taxpayer challenges a tax authority’s decision to suspend transactions on its bank accounts, the case will be considered by an economic court.
The new law introduces amendments to Uzbekistan’s Tax Code and Economic Procedural Code, changing the procedure for suspending transactions on business bank accounts and reviewing related disputes.
Under the new rules, heads of tax authorities and their deputies may suspend transactions on taxpayers’ bank accounts if the taxpayer does not object to the decision. If a business challenges the decision, the dispute will be referred to an economic court. The tax authority must provide evidence of the alleged violation, along with documents confirming that the taxpayer was notified.
The tax authority must submit the relevant application to the court within three days of receiving the taxpayer’s objection. Transactions on the accounts remain suspended until the court issues its decision. If the court rejects the request to maintain the restriction, it will be lifted once the court ruling enters into force.
When can account restrictions be lifted?
The law also provides mechanisms for lifting restrictions imposed by tax authorities after the relevant violations have been remedied. These include cases where:
- Financial or tax reports have not been submitted within the prescribed period, including the applicable 10-day period;
- Explanations, corrections or other documents requested following a desk tax audit have not been provided on time;
- Tax officials are denied access to a company’s premises during an inspection;
- A taxpayer cannot be found at its registered address.
Once the relevant violations are remedied, the decision to suspend transactions on the taxpayer’s bank accounts may be revoked.
Suspending transactions on bank accounts can directly affect a company’s daily operations. Restrictions may delay payments to suppliers, salary transfers and other financial transactions.
The new rules give businesses a way to challenge tax authorities’ decisions in court. They also require tax authorities to substantiate their decisions with evidence and documentation confirming that the taxpayer was notified.
Under the previous procedure, heads of tax authorities and their deputies could suspend account transactions for up to 10 days. Restrictions extending beyond that period required a court decision based on an application from the tax authority.
The changes establish a clearer role for judicial oversight in disputes between businesses and tax authorities. Their practical impact will depend on how the new rules are implemented and how quickly tax disputes are resolved.
