ABACUS lawyers have secured the return of UZS 1.2 billion to a client, a Tashkent-based company. The funds had been debited from the company’s bank account under a collection order issued by the tax authority. The matter was resolved in cooperation with the Commissioner under the President of the Republic of Uzbekistan for the Protection of the Rights and Legitimate Interests of Business Entities (Business Ombudsman).
The district State Tax Inspectorate debited the funds from the company’s account to recover a tax debt out of the taxpayer’s accounts receivable. The company submitted documents to the tax authority confirming that there was no outstanding debt. Nevertheless, the withheld funds were not returned.
The withdrawal of such a significant sum from circulation seriously affected the company’s operations. Its standing in the sustainability rating of business entities fell to a critical level, and its requests to the tax authority were to no avail.
ABACUS lawyers analysed the grounds for the recovery and the documents confirming the company’s settlements with its counterparties. On that basis, they developed a legal position and prepared a set of documents substantiating the return of the funds. The matter was considered in cooperation with the Business Ombudsman.
The full amount of UZS 1.2 billion has been returned to the client.
When a tax debt is recovered out of accounts receivable, documentary evidence of mutual settlements with counterparties is decisive: contracts, reconciliation statements and payment documents.
If the grounds for debiting funds from an account are in doubt, companies are advised to:
- establish which debt the collection order is based on;
- request written clarification from the tax authority;
- where there are grounds, challenge the recovery before a higher tax authority or in court.
Businesses are also entitled to seek protection of their rights from the Business Ombudsman.
ABACUS’s Tax practice advises companies on tax administration and represents them in tax disputes.
