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TAX CODE OF THE REPUBLIC OF TAJIKISTAN SECTION II. GENERAL ADMINISTRATIVE PROVISIONS CHAPTER 10. COMPULSORY COLLECTION OF TAXES Article 92. Measures to Ensure Fulfillment of a Tax Obligation Not Met on Time 1. Tax authorities shall ensure fulfillment of a taxpayer's tax obligation that has not been met on time using the following measures provided for by this Code: 1) accrual of interest on the amount of taxes not paid on time; 2) suspension of spending operations on accounts at banks and other financial and lending institutions; 3) attachment of the taxpayer's property and collection of the amount owed by the taxpayer. 2. In the event that a taxpayer fails to fulfill obligations to pay tax, penalties, and interest within the established deadlines, that is, if a taxpayer is in arrears, tax authorities shall notify the taxpayer of the need to pay the tax within 10 days of the taxpayer's receipt of the notification, and of the possibility that measures specified under subitems 2) and 3) of item 1 of this article may be taken against him in the event of nonpayment of tax, penalties, and interest. Except as otherwise provided by this Code, interest shall be charged in all cases in which a taxpayer is in arrears and notification of the taxpayer shall not be required in order to take this action. 3. The rules of this chapter shall apply to tax agents following the same procedure as that established for taxpayers. 4. This chapter shall be applied in compliance with the provisions of the Civil Code of the Republic of Tajikistan regarding the order of priority for debiting funds from bank accounts. Article 93. Interest on Underpayment and Overpayment of Taxes 1. With the exception of those cases established by this Code, if any tax amount, including a current payment, has not been paid by the established deadline, that is, there is an underpayment (arrears), a taxpayer shall be required to pay interest on the amount of the underpayment (arrears) for the period from the payment deadline to the date on which the amount that was underpaid (in arrears) is paid. 2. If more than 30 calendar days have passed from the date on which a taxpayer files a request for a refund of taxes paid in excess of the required amount, that is an overpayment, until the date on which the overpayment is actually refunded, interest shall be payable to the taxpayer on the amount of the tax overpayment at the expense of the respective budget for the period from the date on which a taxpayer files a request for a refund of the overpayment until the date on which the refund is actually made. For the purposes of the previous sentence, in cases in which an overpayment is credited against another payment, a refund shall be considered to have been made on the date the crediting was performed, or if the overpayment and arrears apply to different budgets, on the date permission for the crediting is received. Interest shall not be payable to a taxpayer if a refund is provided within 30 days from the date the taxpayer files a request for a refund of payments made in excess of the required amount. 3. The interest rate payable in accordance with this article shall be established as simple interest equal to 150 percent of the refinancing rate of the National Bank of Tajikistan, determined for each current quarter in the form of the arithmetic average of refinancing rates for the previous quarter. 4. Interest shall not accrue on penalties and accrued interest. 5. If a taxpayer has made an overpayment on one type of tax and an underpayment on another type of tax, no interest shall be charged on the arrears for the period when the amount of the arrears was less than the amount of the overpayment, if the overpayment and arrears apply to the same budget. 6. An instruction on the accrual of interest on tax underpayments and overpayments shall be adopted by the authorized government body in consultation with the Republic of Tajikistan Ministry of Finance and the National Bank of Tajikistan. Article 94. Suspension of Spending Operations on a Taxpayer's Accounts at Banks and Other Financial and Lending Institutions 1. The suspension of spending operations on a taxpayer's accounts at banks and other financial and lending institutions (with the exception of banks' correspondent accounts) (referred to hereinafter as "suspension of spending operations on bank accounts") with respect to a legal entity and individual entrepreneur shall be effected if at least one of the following cases applies: 1) if the taxpayer fails to submit a tax return within the established deadline and the tax authority has notified the taxpayer of the need to submit it, and the tax return has not been submitted within 30 calendar days of the date of such notification; 2) in the event of a failure to pay tax, penalties, and interest within the time period specified under item 2 of Article 92 of this Code, a tax authority shall issue another notification of the need to pay tax, penalties, and interest, and if the tax debt (arrears) is not discharged within 30 calendar days of the taxpayer's receipt of the second notification; 3) refusal to grant access to tax authority officials to perform tax audits and to inspect objects of taxation and objects related to taxation, except in cases in which they violate the procedure established by this Code for the performance of tax audits, if 10 calendar days have passed since the date on which the taxpayer received notification from the tax authority of the need to grant access to tax authority officials to perform a tax audit, and of the possibility of the application of measures provided for under this article. 2. If the grounds specified under item 1 of this article are present, the first director (or a person serving in his place) of the tax authority with which a taxpayer is registered shall petition a court with jurisdiction over the area in which the taxpayer is located, following the procedure established by the legislation, to suspend spending operations on the taxpayer's bank accounts, accompanied by the simultaneous notification of the taxpayer of the petition filed with the court. 3. The suspension of spending operations on bank accounts shall apply to all of a taxpayer's spending operations, other than those related to the payment of accrued wages and the discharge of tax debt. 4. A court decision to suspend spending operations on a taxpayer's bank accounts shall be subject to unconditional implementation by banks and institutions performing certain types of banking operations. 5. A tax authority shall undertake the appropriate measures to implement a court decision to suspend spending operations on a taxpayer's bank accounts 6. A tax authority shall repeal the suspension of spending operations on bank accounts no later than one banking day following elimination of the grounds that served as the reason for the suspension of spending operations on bank accounts and shall provide information to this effect to the taxpayer and the interested bank within the same time period. 7. A regulation on the suspension of spending operations on a taxpayer's accounts at banks and other financial and lending institutions and on the repeal thereof shall be adopted by the Republic of Tajikistan government. Article 95. Attachment of Property 1. Attachment of property as a means of ensuring fulfillment of a tax obligation shall refer to an action by a tax authority to restrict the ownership rights of a taxpayer (or other responsible person) with respect to his property. 2. The attachment of property may be full or partial. The full attachment of property shall refer to a restriction of a taxpayer's rights with respect to his property, under which he does not have the right to determine the disposition of the attached property, and the possession and use of this property is allowed with the written permission and under the control of a tax authority. The partial attachment of property shall refer to a restriction of a taxpayer's rights with respect to his property under which the taxpayer enjoys the independent possession and use of this property, but disposition of the property is allowed only with the written permission and under the control of a tax authority. 3. A partial attachment may be applied to a taxpayer who has an outstanding tax debt 60 calendar days after expiration of the established payment deadline for at least one type of tax. A full attachment may be applied after the application of a partial attachment and if there is an outstanding tax debt 120 days after expiration of the established tax payment deadline. In the event of a change in the deadline for the payment of taxes in accordance with Article 90 of this Code, calculation of the aforementioned time periods shall begin on the first day after expiration of the extended tax payment deadline. 4. A preliminary condition for the attachment of property shall be the performance of actions provided for under item 2 of Article 92 of this Code. In order to effect a partial or full attachment of property, a tax authority shall be required no earlier than 15 calendar days before the expiration of the deadlines referred to in item 3 of this article, to notify the taxpayer in writing of its intention to apply the partial or full attachment procedure against him. The attachment of property may be effected only after the expiration of this 15-day warning period and if the tax debt (arrears) has not been discharged in full during this period. The form for notification of the intention to apply the partial or full attachment procedure shall be determined by the authorized government body. 5. When a taxpayer's property is attached, in the event that the taxpayer submits a realistic financial recovery plan, the tax authority and the taxpayer may conclude an agreement on the procedure and deadlines for the repayment of arrears. The agreement may call for suspension of the attachment of certain types of property, or the replacement of full attachment with partial attachment with respect to all of the property or a portion thereof. 6. Any types of property held by a taxpayer may be attached, with the exception of property against which collection action may not be taken in accordance with the laws of the Republic of Tajikistan. 7. Only that property which is necessary and sufficient to meet a tax obligation shall be subject to attachment. The attachment of property shall be effected in the following order: 1) cash, including foreign currency, held in the cash department or under the control of officials (employees) of a taxpayer. Foreign currency that is part of recovered property shall be transferred to the National Bank of Tajikistan for conversion into the domestic currency of the Republic of Tajikistan no later than the next banking day and for transfer to the budget, together with attached domestic currency, against payment of the taxpayer's tax obligations; 2) property that is not directly involved in the output of products (goods), specifically securities, foreign exchange assets, passenger cars, interior design elements of office (administrative) and non-manufacturing premises, other highly liquid types of property, etc.; 3) finished products (goods), as well as other tangible assets not intended for direct use in production; 4) raw materials and supplies intended for direct use in production, as well as machine tools, equipment, buildings, structures, and other fixed assets. Machine tools, equipment, buildings, structures, and other fixed assets of state-owned enterprises and organizations shall not be subject to attachment; 5) other property. The seizure of property owned by a taxpayer that has been transferred to another person under a financial leasing arrangement or that has been mortgaged shall be prohibited, and it shall be prohibited to make changes in the terms of the agreement (lease and/or mortgage) from the moment that a decision is issued to attach such property and until such time as this decision is rescinded. 8. The attachment of a taxpayer's property shall be carried out on the basis of a petition filed with the courts by the first director of a tax authority (or his authorized deputy). 9. A court decision to attach property issued in accordance with item 8 of this article shall be transferred within two business days to the appropriate tax police unit for execution. Tax authority employees may participate in the property attachment process together with tax police employees. Prior to the attachment of property the officials carrying out the attachment shall be required to present the taxpayer (or his representative) with the court decision and documents certifying their authorities. 10. The attachment of the property of a taxpayer (other responsible person) shall be carried out in the presence of witnesses. The tax police unit carrying out the attachment of property shall not have the right to deny the taxpayer (his legal and/or authorized representative) the opportunity to be present during the attachment of property. Persons participating in the attachment of property as witnesses, as well as the taxpayer (his representative), shall receive an explanation of their rights and responsibilities. 11. The attachment of property may not be performed at night. 12. A protocol regarding the attachment of property shall be prepared as part of the attachment process. The protocol or an inventory attached to it shall contain a description and list of the property being attached, with a precise indication of the name, quantity, and individual features of the objects, and their value if possible. All objects that are subject to attachment shall be presented to the witnesses and the taxpayer (his representative). The protocol of the property attachment shall be prepared in triplicate; one copy shall be provided to the tax authority, the second copy shall be provided to the tax police unit that carried out the property attachment, and the third copy shall be provided to the taxpayer whose property has been attached. 13. The head of the tax police unit executing a decision to impose a full attachment of property, in consultation with the director of the tax authority that filed the petition with the courts to impose a full attachment of property, shall determine the place where the property that has been attached is to be located (stored). 14. A tax police unit may independently provide for the storage of attached property or may transfer it on a contractual basis to a third party for storage, or in certain cases may leave the attached property with the taxpayer for storage. In the latter case the taxpayer shall bear liability for the safekeeping of the attached property. 15. Transactions effected by a taxpayer (other responsible person) with respect to attached property in violation of the procedure established under this article shall be considered invalid. 16. On the basis of a written notification from a tax authority regarding a court decision to impose a full attachment on a taxpayer's property, customs authorities shall suspend export operations involving all of the attached property of the given taxpayer for the period specified in the written notification from the tax authority. 17. A court decision regarding the attachment of property shall be considered lifted from the moment the decision is overturned by a higher court, and fulfilled from the moment the tax obligation is met. A court decision shall be suspended from the moment a prosecutor files a protest until such a protest is heard on its merits following the procedure established by law. 18. A regulation on the procedure for the implementation of property attachment, taking into consideration the requirements of this article, shall be adopted by the Republic of Tajikistan government. Article 96. Sale of Attached Property 1. Attached property seized from a taxpayer and property obtained from a debtor of a taxpayer in accordance with Article 97 of this Code, if it has not be provided in the form of cash, shall be sold at public auction, the procedure and conditions for which shall be determined by the Republic of Tajikistan government. 2. Proceeds from the sale of property shall be used to pay taxes, penalties, and interest in accordance with Article 91 of this Code, as well as expenses related to its storage and sale, including those incurred by the tax authority and tax police unit. The balance of funds shall be returned to the taxpayer within three banking days. Article 97. Collection of Sums Owed by a Taxpayer 1. The collection of cash from the bank accounts of a taxpayer and its debtors shall be carried out through legal proceedings. A tax authority shall have the right to forward to a bank or other financial and lending institution at which accounts of a taxpayer and/or its debtors have been opened and are serviced, a court decision regarding the collection of cash from the accounts of a taxpayer and/or its debtors, which requires the bank and other financial and lending institutions to effect the direct payment (bypassing the taxpayer and his accounts) of any amount available on the accounts of the taxpayer and/or its debtors to the appropriate budget within 10 days of the date of receipt of the instruction. 2. In the event of the application of item 1 of this article, the collection of a tax debt at the expense of funds on a taxpayer's accounts at a bank or other financial and lending institution shall be effected after receipt of the court decision calling for the collection of cash from a taxpayer's accounts according to the following procedure: 1) the tax authority shall forward the relevant court decision to a bank or other financial and lending institution at which a taxpayer's accounts have been opened and are serviced; 2) the collection of a tax debt at the expense of funds on a taxpayer's accounts at a bank or other financial and lending institution shall be effected on the basis of a collection order issued by the respective tax authority; 3) a collection order for the collection of a tax debt shall be forwarded to a bank or other financial and lending institution at which a taxpayer's accounts have been opened and are serviced, and it shall be executed following the procedure established under subitem 2) of Article 76 of this Code; 4) a collection order shall be presented in a form established by regulatory legal acts of the Republic of Tajikistan, and it must indicate the taxpayer's account (accounts) from which the tax debt is to be collected; 5) in the event of a lack of funds on a taxpayer's accounts in the domestic currency, the collection of a tax debt shall be effected from the taxpayer's foreign currency accounts, applying the exchange rate of the domestic currency against the foreign currencies established by the National Bank of Tajikistan as of the collection date; 6) provided that there are sufficient funds on a taxpayer's account (accounts), a collection order for the collection of a tax debt shall be executed by a bank or other financial and lending institution no later than one business day after the day on which the order is received; 7) if there are insufficient funds or no funds on a taxpayer's account (accounts), a collection order (orders) shall be executed as funds are posted to this account (these accounts). 3. In the absence of the circumstances referred to under item 2 of this article, the application of item 1 of this article with regard to the collection of a tax debt from the accounts of a taxpayer's debtors shall be carried out according to the following procedure: 1) in the absence of funds on a taxpayer's accounts, the tax authority with which the taxpayer is registered shall have the right, within the amount of the tax debt, to collect the funds owed by the taxpayer from the accounts of the taxpayer's debtors. In this case the tax authority shall forward to the debtor and the bank or other financial and lending institution the relevant court decision and a notification of collection action against funds on its (the debtor's) accounts to pay the taxpayer's tax debt. Such notification shall mean that there is a ban on payments by the debtor to discharge its debt to the taxpayer. No later than 30 calendar days after the date on which notification is received, a debtor shall be required to submit to the tax authority that sent the notification a reconciliation statement of mutual settlements, compiled jointly with the taxpayer as of the date notification is received; 2) a reconciliation statement of mutual settlements between a taxpayer and a debtor must contain the following information: - the name of the taxpayer and the debtor, and
their taxpayer identification numbers; 3) on the basis of a reconciliation statement of mutual settlements, the tax authority with which a taxpayer is registered shall present a collection order to collect the taxpayer's tax debt from the debtor's account (accounts); 4) a debtor's bank or other financial and lending institution shall be required to execute a collection order presented for the collection of a taxpayer's tax debt in accordance with the requirements set forth under item 2 of this article. Article 98. Liability of Persons Who Have Received a Taxpayer's Assets at Below-Market Prices In the event that a taxpayer's tax obligation has remained unmet after the sale of attached property, a person who has obtained a taxpayer's assets in the course of a transaction that was not effected on market terms and that took place within the three years preceding the date on which the property attachment procedure was applied, shall bear liability for fulfillment of the taxpayer's tax obligation in an amount equal to the value of the assets received, less any amount paid by the given person for these assets. Article 99. Writing Off Bad Tax Debts Bad debts on taxes, interest, and penalties shall
be written off in accordance with the procedure established
by the Republic of Tajikistan government.
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