On-Site Tax Audit and Appeal of Its Results (Uzbekistan)

Publication date: 20.03.2025

An on-site tax audit is an inspection of a taxpayer regarding the fulfillment of their obligations in the calculation and payment of taxes and fees, as well as other duties established by the tax legislation of the Republic of Uzbekistan. During such an audit, accounting records, the movement of inventory and cash, and other information related to the taxpayer’s activities are analyzed. The audit is carried out at the taxpayer’s location (on their premises).

During the audit, the exchange of documents between the tax authority and the taxpayer takes place as follows:

Relevant documents are sent to the taxpayer’s personal electronic account. These documents are considered received by the taxpayer once they are read, but no later than 3 (three) days after being sent.
If the taxpayer does not have a personal account, documents are sent by registered mail and are considered received 5 (five) days after dispatch.
Documents can also be personally delivered to the taxpayer or their representative against signature with an indication of the date of receipt.

Taxpayers (legal entities and individual entrepreneurs) do not always agree with the results of a tax audit. Below are the stages of initiation, execution, and appeal of the results of an on-site tax audit.

1. Grounds for Conducting an On-Site Tax Audit

An on-site audit is carried out in the following cases:

The tax risk management system has identified a risk of tax law violation by the taxpayer.
Complaints from individuals or legal entities are received regarding tax or currency violations by the taxpayer, including unjustified price increases for goods and services, or illegal passenger transportation activities.
Information about tax and currency violations is published in the media.
The need arises to obtain additional information from the taxpayer to objectively carry out a desk audit.
Additional tax control measures are needed during VAT special registration procedures.
The taxpayer fails to submit, or incompletely submits, data or documents requested by the tax authority during monitoring of currency transactions.
Information is received from courts, law enforcement, or other state bodies indicating tax or currency violations.
Tax inspectors detect falsification, counterfeiting, or violations of mandatory digital marking rules during their duties.

Exemptions from Audit

An on-site audit is not conducted:

For active business entities with an "AAA" rating in the Stability Rating of Entrepreneurs.
For commercial organizations that have not conducted financial or economic activities since registration and have no tax arrears.

However, audits may be conducted without restrictions for any state enterprises or legal entities with state participation of 50% or more.

The stability rating of business entities is automatically formed on the online platform "Entrepreneurs' Stability Rating" and is published on the website of the Chamber of Commerce and Industry of Uzbekistan (https://chamber.uz).

2. Initiation of the Audit

The head (or deputy head) of the tax authority issues an order to conduct the audit. The order must be registered in the Unified System of Electronic Audit Registration.

3. Notification of the Business Ombudsman

Before starting the audit of a legal entity, the tax authority must notify the Business Ombudsman – the Commissioner under the President of Uzbekistan for the protection of entrepreneurs’ rights. The taxpayer is not notified in advance.

4. Actions on the First Day of the Audit

On the first day of the audit, tax officials must:

Inform the taxpayer (or their representative) about the purpose of the audit and present their ID.
Deliver a copy of the audit order to the taxpayer.
Explain the taxpayer’s rights and obligations related to the audit.

5. Rights of the Taxpayer During the Audit

The taxpayer has the right, among others, to:

Deny entry to tax officials if:
- The audit order is not properly issued or not delivered (unless the taxpayer refused to receive it).
- The official conducting the audit is not listed in the order and/or does not present an ID.
- The audit period indicated in the order has not started or has expired.
Refuse to fulfill demands unrelated to the audit.
Personally or through a representative participate in the audit.
Provide explanations to the tax authorities regarding tax compliance.
Refuse to submit documents if they were already provided during a previous audit or monitoring.
Request a different expert and file a motion for recusal of the appointed one.
Attend examinations, give explanations, and review expert conclusions.
Familiarize themselves with audit materials and receive the audit report.
Appeal illegal actions of tax officials.
Provide reports or conclusions from tax consultants covering the audit period.

6. Powers of Tax Officials

Tax officials, depending on the taxpayer’s activity, may:

Verify compliance with trade and service rules, including use of cash registers and payment terminals.
Conduct checks for counterfeit goods and violations of marking rules without prior notice, informing the Business Ombudsman on the day of inspection.
Audit retailers of goods subject to mandatory digital marking.
Request and examine accounting documents, including electronic records.
Inspect premises, territories, documents, and objects related to taxable activity.
Conduct control purchases with mandatory video recording.
Take inventory of assets, cash, and settlements.
Verify compliance with currency control rules by residents and non-residents.
Check banks for timely execution of payment orders.
Verify actual workforce numbers against tax reports.
Check compliance at markets, shopping centers, and parking areas.

Officials are not allowed to request documents unrelated to the audit.

7. Duration of the Audit

An on-site audit lasts a maximum of 10 (ten) days and cannot be extended.

8. Completion of the Audit

After completion, a report is prepared in two copies and delivered to the taxpayer the same day. If no violations are found, this must be stated in the report. The report may be prepared electronically and sent through the taxpayer’s personal account.

9. Taxpayer’s Right to Object

If the taxpayer disagrees with the report, they may submit written objections (with supporting documents) within 10 days of receipt.

10. Decision of the Tax Authority

The head (or deputy head) of the tax authority must review the report and objections within 15–20 days and issue a decision to hold the taxpayer liable or refuse to do so. The decision must be delivered within 2 days and takes effect after 1 month.

11. Interim Measures

Before the decision enters into force, the tax authority may adopt interim measures such as:

Prohibiting disposal or pledging of the taxpayer’s property.
Freezing bank accounts.

12. Payment and Appeal

If the taxpayer agrees, they must pay the additional taxes, fines, and penalties. The taxpayer may appeal the decision within:

30 days to a higher tax authority, or
10 days to an administrative court.

Appeals suspend enforcement until a decision is made.

13. Jurisdiction of Courts

Tax disputes are heard by inter-district, district, or city courts (unless within the competence of higher courts).

Economic courts handle:

Tax debt recovery cases (filed by tax authorities).
Refund claims (filed by taxpayers).
Cases applying legal measures.

Administrative courts handle:

Appeals of tax authority decisions.
Appeals of actions/inaction of officials.
Appeals of refusals to register consolidated taxpayer groups.

14. Administrative Liability

If violations requiring administrative liability are found, the tax authority draws up an administrative offense protocol. Such cases are considered by district or city criminal courts.

Sanctions may include:

Freezing bank accounts for up to 10 days (longer only by court order).
Administrative fines under relevant Code articles.
Tax fines per Articles 219–227 of the Tax Code.
Criminal cases if violations under Articles 184, 184-1 of the Criminal Code are detected.