March 11, 2024

Amendments in the insolvency legislation

On 22.02.2024, Law No. ZRU-911 “On Amendments and Additions to Certain Legislative Acts of the Republic of Uzbekistan in connection with the adoption of the Law of the Republic of Uzbekistan “On Insolvency” came into force.

The document amended 25 laws and provisions relating to various aspects of insolvency. Thus, changes have been made to the norms of the Criminal, Civil Codes and the Code of Administrative Responsibility.

In particular, the amendments made to the Civil Code allow the court to recognize an individual (natural person) as insolvent. To do this, it must be proved that it is unable to satisfy creditors’ claims or fulfill duties on taxes and fees.

The inability to fulfill tax obligations may also become the basis for recognizing an individual entrepreneur or a legal entity as insolvent. The clause on mandatory liquidation of an insolvent legal entity has been deleted.

Amendments have been made to the Tax Code, according to which:

  • during the procedure of judicial sanitation or external management, all current tax payments are suspended, with the exception of income tax on employment contracts and civil law contracts, as well as social contributions. Thus, the tax arrears formed during the reorganization or external management can be paid in installments. In this case, the specified debt is payable in equal installments within 6 months from the date of approval by the court of the report, the sanitizing manager or the external manager and the issuance of a ruling on the termination of insolvency proceedings.
  • the share of funds received from the sale of the debtor’s property declared bankrupt and aimed at paying off the debt is not taken into account as the debtor’s income. A court administrator involved in insolvency cases is allowed to file lawsuits and other applications to the court without paying a state fee. Later, the expenses will be reimbursed at the expense of the debtor’s property out of turn.