Banks will be able to directly sell property acquired through debt
In Uzbekistan, in order to encourage debt collection without going to court, tax incentives will be provided to banks, investment companies, and certain real estate buyers. Direct sale of property voluntarily handed over to the bank in exchange for debt will also be permitted.
Banks will be able to directly sell property acquired in lieu of debt
According to the document, until January 1, 2030, a number of tax incentives will apply to real estate objects taken onto the balance sheets of commercial banks in lieu of debt, as well as those held on the balance sheets of investment companies established by banks.
In particular, commercial banks accepting such real estate onto their balance sheets will be exempt from property and land taxes for a period of 6 months.
For investment companies established by banks, this incentive will be valid for 12 months from the date the property is accepted onto the balance sheet.
Additionally, buyers who purchase these real estate objects by paying their full value will also not pay property tax and land tax for 12 months.
Another incentive is related to the debtor's voluntary transfer of property to the bank. If a legal entity voluntarily transfers its property to a commercial bank based on an agreement to surrender property in lieu of debt, it will be exempt from paying VAT.
A special procedure for calculating VAT will also be introduced when commercial banks sell property accepted onto their balance sheets in lieu of debt with an installment payment condition for a period of more than one year. In this case, VAT will be calculated not from the full sale value of the property, but from the positive difference between its sale value and its book value.
In order to encourage out-of-court debt collection, state-owned banks will also be given additional opportunities.
It is permitted to directly sell at market value the property transferred to a state-owned bank based on an agreement on the voluntary surrender of the debtor's property.
It will be possible to sell such property not only on a lump-sum payment basis, but also on credit, with installment payment conditions, through leasing, or on the basis of other transactions not prohibited by law.
It is also planned to facilitate the process of transferring pledged property to the bank.
Even if there are prohibitions imposed by tax authorities or the Bureau of Compulsory Enforcement due to debts on taxes and other mandatory payments when the property is being transferred to the bank, notaries will be authorized to perform the relevant notarial transactions.