Uzbekistan Expands Tax Controls on Property and Timber Deals

Tashkent, Uzbekistan (UzDaily.com) — The Cabinet of Ministers of Uzbekistan has approved a new procedure for calculating the tax base for certain categories of goods and property based on their market value. The resolution, dated May 18, was published on the national legal database Lex.uz and introduces a mechanism for adjusting tax obligations when transaction prices significantly deviate from market levels.

The document is based on Article 248 of the Tax Code, which grants tax authorities the right to revise the tax base in cases where goods or services are sold at prices substantially different from market rates. The new procedure applies to real estate and timber products.

According to the resolution, adjustments to the tax base will be applied when the declared transaction price is more than 20% lower than the average market value of comparable goods. The calculation is based on data from comparable transactions, taking into account delivery conditions, the region of the deal, and other factors affecting pricing.

Tax authorities will be allowed to use a wide range of data sources, including the unified notary system, customs records, exchange quotations, public procurement and auction platforms, seller price lists, media and online sources, as well as bank data on collateral valuations. In addition, market valuations conducted by the authorized cadastral body may also be used.

For goods traded on exchanges or electronic platforms, market value will be determined based on quotations of similar goods at the date of the transaction. If such data is unavailable, prices of comparable goods will be used. In cases where a discrepancy is identified between market and contractual value, the tax base will be increased by the difference multiplied by the transaction volume.

The resolution stipulates that additional tax assessments will not be accompanied by financial penalties. However, additional VAT charged may be treated as a deductible expense, except in cases identified through tax audits.

The new rules do not apply to transactions subject to transfer pricing regulations, operations with state-regulated tariffs, goods produced by natural monopolies, sales under preferential pricing set by presidential or government decisions, or transactions conducted through exchange trading.