Tashkent, Uzbekistan (UzDaily.uz) — Uzbekistan’s Tax Committee plans to develop its transfer pricing administration system and introduce advanced international practices. The International Monetary Fund (IMF) conducted an assessment in Tashkent of the committee’s readiness to administer international taxation, including oversight of cross-border transactions, the Tax Committee said.
The assessment was conducted using the FITAS (Framework for International Tax Administration Strengthening) methodology, which the IMF uses to determine the level of maturity of tax authorities in different countries in the field of international taxation.
Transfer pricing governs the setting of prices in transactions between related companies.
The international standard is the arm’s length principle, under which the price of an intra-group transaction should correspond to the level that would have been established between independent parties.
The Tax Committee has a specialized Department of International Taxation, with a separate transfer pricing unit. The Tax Code provides for transfer pricing rules, a controlled foreign company regime, restrictions on interest deductions, withholding taxes and a general anti-avoidance rule.
In addition, Uzbekistan has around 55 double taxation avoidance agreements.
The Tax Committee noted that the practical application of transfer pricing instruments is at an early stage.
As part of cooperation with the IMF, Uzbekistan plans to strengthen the expertise of specialists, improve transaction documentation, use international databases of comparable data and develop the mechanism for advance pricing agreements (APAs).
The first transfer pricing audit conducted in Uzbekistan confirmed the practical importance of this area for the state budget.
The Tax Committee views cooperation with the IMF as one element of professional development for specialists and intends to continue introducing international tax administration standards into national practice.
