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Changes in Taxation
Below is the brief summary of the most important updates, which took place in the period 1 April 2007 31 July 2007
Insurance premiums are exempt from taxation
Further to Presidential Decree ПП-618 of 10 April 2007 and Regulation on practical implementation of this Decree, as of 5 July 2007:
- insurance premiums paid by legal entities under contracts for property insurance and long-term life insurance of their employees are deductible for corporate income (profits) tax
- insurance premiums paid by legal entities under the contracts for long-term life insurance of their employees are exempt from personal income tax (PIT); individuals who paid (property or long-term life) insurance premiums themselves have the right to deduct them from their aggregate income for the PIT purposes.
List of activities subject to licensing is expanded
Law ЗРУ-102 was issued on 17 July 2007 to expand the list of activities subject to licensing. The list now includes tobacco fermentation and production of tobacco goods.
Privatisation and attraction of foreign investments
Presidential Decree “On measures for further development of privatisation and attraction of foreign investments in 2007 2010” (Decree) was issued on 20 July 2007.
The Decree assigns the State Property Committee and all related ministries to combine a list of enterprises with the state participation subject to privatisation through public auctions. Such enterprises can be sold to foreign investors at 'zero' value provided that the investors fulfill their investment commitments.
Monetary funds (in freely convertible currencies) invested by the foreign investors for privatisation of the enterprises with the state participation would be transferred to a special account of the enterprise and exempt from obligatory sale.
Furthermore, property invested by the foreign investors for privatisation of the enterprises with the state participation would not be subject to:
- corporate income (profits) tax
- infrastructure development tax
- value added tax
- withdrawal to the state budget as a settlement of the enterprises' unpaid tax liabilities.
Amendments to certain legislative acts
On 23 July 2007 Law ЗРУ-104 on introducing changes to certain legislative acts (Law ЗРУ-104) was issued. The changes are enforced as of 24 July 2007. Below we provide a summary of the most notable amendments.
Law on joint stock companies
Among other changes to this Law, Article 110 was added stating that a joint stock company with the assets value of Uzbek Soum (UZS) 1 billion and more should have an internal audit department. The department is subordinate to the supervisory board.
Law on limited liability companies
Similarly with the joint stock companies, LLCs with the assets value of UZS 1 billion are required to have the internal audit department, subordinate to the supervisory board.
In addition, the Law ЗРУ-104 abolished Articles 28 and 47 of the Law on LLCs. These Articles were defining the procedure and terms for LLCs to issue bonds.
Tax Code
Paragraph 4 is added in Article 16 stating that income (profits) of a shareholder (legal entity) received in the form of additional shares or increase of the nominal value of existing shares resulted from the reinvestment of prior years retained earnings is not included in the income (profits) tax base.
Minimum monthly wage
As of 1 August 2007 the minimum monthly wage is increased from UZS 12,420 to UZS 15,525. |
