Leges Advokat has prepared an analysis of the main taxes by residents and non-residents under the Tax Code of the Republic of Uzbekistan. The document contains a summary of taxes, by indicating their main features, such as taxpayers, taxation objects, tax base, tax rate, tax reporting, and tax payment deadlines.
Dominant position - position on a commodity or financial market of a business entity or group of persons when its market share (i) is equal to 50% and more; or (ii) accounts for 35%-50% provided that all of the following conditions are met:
Anti-monopoly Authority - the Antimonopoly Committee of the Republic of Uzbekistan.
Clearance – clearance of transactions through the Anti-Monopoly Authority by obtaining its preliminary approval.
Official - any person holding a managerial position within the acquirer (e.g. directors, CEO, CFO).
Citizen - any person who does not hold any managerial position, but can also be blamed for the infringement.
SOEs – business entities with a state share in the charter fund, state unitary enterprises and public institutions with the authority to carry out economic activities;
BEA – basic estimate amount, i.e. the unit of calculation of the state fees used in the Republic of Uzbekistan (as of 24 June 2022 1 BEA is equal to UZS 300,000 / approx. USD 28)
Clearance Thresholds
Anti-monopoly clearance is required in the following cases:
Application of thresholds to joint ventures
The same thresholds apply to joint ventures.
Turnover/assets calculation rules
Generally, the threshold is extended to the global turnover/assets of the parties to the transaction. However, the Anti-monopoly Authority will not be able to verify the information related to foreign assets, thus prevailing emphasis is put on the Uzbekistan-based assets.
The turnover of the last two calendar years shall be used.
Undertakings concerned
Depending on the type of transaction, the Anti-Monopoly Authority will scrutinize the information of the following parties:
Merger and joinder transactions – both parties involved in the merger and joinder;
Acquisition – acquirer and the target (seller is not considered).
“Single-trigger” thresholds
The filing will apply even where only one party to the transaction derives revenue in the local market, as long as it meets the threshold.
Special sectorial rules
Special rules for turnover calculation for the financial and commodity markets.
Application of thresholds to SOEs
Anti-monopoly clearance is required in any case of the reorganization of business entities with state participation, as well as their affiliates or public institutions authorized to carry out economic activities.
Clearance is not required in the following cases:
Minority shareholdings
Minority acquisitions (50% or less of the shares) are not notifiable even if control is acquired (i.e. decisive influence over the target’s business).
Foreign-to-foreign transactions
Only mergers, acquisitions and share acquisitions of Uzbek entities constitute notifiable transactions. Mergers, acquisitions and share acquisitions of foreign entities are not notifiable in Uzbekistan, regardless of their turnover/assets in Uzbekistan and regardless of whether the foreign target has a subsidiary in Uzbekistan.
Sanctions
The execution of the transaction without the clearance is the basis for holding the transaction invalid if it harms to the competition or leads to taking or strengthening a dominant position. In such a case, the Authorised body will make one of the following decisions:
Herewith, non-obtaining of the clearance is a direct violation of Article 178 of the Code of Administrative Responsibility “Infringement of laws on competition, natural monopolies, and consumer protection”. The sanction for this is a fine in the amount of:
Notification
Clearance procedure is to be filed to the Antimonopoly Authority through the Public Service Centers (PSC) or electronically by presenting the following information/documents:
1. application in with indication of the following information:
2. information about the company, its TIN, legal address, telephone number, email address, number of shares to be sold to the acquirer, the value of the property to be contributed by the acquirer to the charter fund of the target company, composition of shareholders of the company;
3. information about the presence of the company in the charter fund of other only local companies (name of these companies, their TIN, area of operation and shares of the company in these companies);
4. information on the types of activities, names and categories of goods produced and sold, and their quantities within 2 years preceding the date of filing to the Antimonopoly Authority;
5. financial and statistical reports of the companies for the 2 previous calendar years;
Please note that even if the requested information is a trade secret, it cannot be a ground for refusal to provide it to the Antimonopoly Authority.
Deadline to file
At any time prior to the closing of the transaction.
In accordance with clause 24 of the Regulation, the transaction shall be concluded within 1 year upon the issuance of the clearance.
Filing fees
Acquisition transactions – 7 BEA (UZS 2,1 million /approx. USD 194);
Merger & joinder – 0.05% of the income gained by the companies from the sale of goods in the last calendar year (in the absence of income – 0.05% of the book value assets) but not less than 7 BEA (UZS 2,1 million /approx. USD 194)
Clearance timeframe
8 calendar days upon filing (which can be prolonged by the Anti-Monopoly Authority up to a 1-month maximum).
