Uzbekistan clarifies VAT cancellation rules for errors

Tashkent, Uzbekistan (UzDaily.com) — Uzbekistan has established a procedure for terminating value added tax (VAT) registration in cases where taxpayer status was assigned automatically due to errors in reported income exceeding the statutory threshold.

The changes were introduced to paragraph 37 of the regulation approved under Annex No. 1 of Cabinet of Ministers Resolution No. 595 dated 22 September 2021.

The updated rules address situations in which a taxpayer’s cumulative income for a tax period exceeds 1 billion soums due to a technical or other error, resulting in automatic VAT registration.

Under the current procedure, the tax authority may cancel VAT registration based on an electronic application submitted by the taxpayer. This applies to voluntary deregistration under a prescribed form in accordance with Annex No. 2 of the regulation.

The decision to annul the VAT certificate is made by the head of the tax authority or their deputy. In such cases, the certificate is deemed invalid from the date of its initial issuance.

An example provided in the regulation describes a situation where a turnover tax payer mistakenly issues a receipt or electronic invoice exceeding 1 billion soums, triggering automatic VAT registration without an official application.

After the error is identified, the taxpayer corrects the issued documents, and the actual income from goods and services falls below the threshold.

In such cases, upon submission of an application, the tax authority cancels the VAT registration retroactively from the original date of issuance.

Following cancellation, the taxpayer returns to the turnover tax regime.