Permanent establishment of a foreign company in Uzbekistan

A permanent establishment is the tax status of a foreign company that does business in Uzbekistan through an office, a construction site, personnel or a dependent agent. From the date such activity begins, the company must register with the tax authority (no later than 183 days, or 30 days if the contract runs longer than 183 days) and pay corporate income tax at 15%, plus a further 10% on its net profit. Operating without registration is punished by a fine of 10% of income, but not less than 10 million soums.

In brief:

• A permanent establishment arises where a construction site, installation project or the supply of services through personnel lasts more than 183 days in any 12-month period; an office, a warehouse used as a sales outlet, a production facility or a dependent agent create one with no day threshold at all
• The registration application is due no later than 183 calendar days from the start of the activity; if the contract was concluded for a term longer than 183 days, the deadline is 30 days
• Corporate income tax is 15%, followed by 10% on net profit, treated as a dividend; turnover tax is not available to a permanent establishment
• Without registration the income is taxed at the source of payment at 20%, and the establishment itself is fined 10% of its income, with a floor of 10 million soums
• A double tax treaty may raise the construction-site threshold to 12 months and reduce the tax on net profit, but only where residence is confirmed

Updated: 02 September 2026

What a permanent establishment is and when it arises

A permanent establishment of a foreign legal entity is a fixed place of business through which that company carries out its business activity in Uzbekistan, in whole or in part (Art. 36 of the Tax Code). It is neither a separate legal entity nor a form of registration: the company does not create a new organisation, it acquires a tax status that makes it pay taxes in Uzbekistan on the income connected with that activity.

The Tax Code lists the places that create a permanent establishment with no time threshold whatsoever:

• any place of management, branch, division, bureau, office, room, agency, factory, workshop, shop floor or laboratory;
• a place where goods are produced, processed, assembled, filled or packed;
• any place, including a warehouse, used as a sales outlet;
• a mine, shaft, oil or gas well, quarry or any other place where natural resources are extracted;
• a place of activity connected with a pipeline or gas pipeline, including monitoring or supervision;
• a place where gaming machines, computer networks, communication channels or attractions are installed, adjusted and operated.

Certain activities create a permanent establishment only once a time limit is exceeded. An installation or structure used to explore for and extract natural resources does so if it is used, or ready for use, for more than 183 days. Construction sites and services supplied through personnel follow the rules in the next section.

Preparatory and auxiliary activity

A permanent establishment does not arise where the place of business is used solely to store or display the company's own goods, to maintain stocks that another person processes, to purchase goods or collect information for the company itself, or for any other activity of a preparatory or auxiliary nature. Two conditions apply: the activity must not be part of the company's core business, and it must be carried on for the company itself rather than for third parties.

The exclusion does not help if the same place, or another place in Uzbekistan, already creates a permanent establishment for the company or for a party related to it, or if the combined activity of two related parties ceases to be preparatory and amounts to complementary functions of a single business. This rule closes off the splitting of functions between affiliated companies.

An insurance company (other than in reinsurance) creates a permanent establishment if it collects insurance premiums in Uzbekistan or insures risks through a dependent agent.

Construction sites and services: how the 183 days are counted

A construction site, a construction, installation or assembly project, and the supervisory (monitoring) activity connected with them, create a permanent establishment if they exist or continue for more than 183 days within any consecutive 12-month period. The supply of services, including consulting services, through employees or other personnel engaged for that purpose creates a permanent establishment if it lasts at least 183 days in a 12-month period under the same or a connected project.

The counting rules that are most often overlooked:

• Periods are added together. Where one or several related foreign companies work on the same site in different periods, each shorter than 183 days, those periods are added to the aggregate duration of the activity on the project. Splitting the contract between subsidiaries does not help.
• A mobile project is a single establishment. Road construction, mineral exploration and other activity of a mobile nature are treated as one permanent establishment regardless of relocation.
• Each site counts separately. The rule that several establishments in the area of one tax authority are combined does not apply to construction sites: every project is registered separately.
• Resumption within a year. If a company deregistered its permanent establishment and resumed the same activity within 12 months, it is again treated as having created a permanent establishment from the date of resumption.

The 183-day threshold is set by domestic law. A double tax treaty with the company's country may set a longer period, in which case the treaty applies (see the section on international treaties).

Dependent agents, provision of personnel and joint activity

A permanent establishment also arises without an office of the company's own, if another person acts in Uzbekistan on the company's behalf and habitually concludes contracts, or plays the principal role in concluding them, for the transfer of title, the supply of services or the provision of property for use. Such a person is called a dependent agent; it may be an employee on the payroll or a local partner company.

A permanent establishment does not arise where the company works through an independent agent under a commission, agency or similar contract and the agent is not authorised to sign contracts on its behalf. But if the agent acts predominantly on behalf of a single company, or of several foreign companies related to it, the agent is treated as dependent.

Provision of foreign personnel to another legal entity for work in Uzbekistan does not create a permanent establishment only where three conditions are met at the same time: the personnel act on behalf of and in the interests of the receiving company; the company that provided the personnel is not liable for the results of their work; and the income from providing the personnel does not exceed 10% of the total cost of providing them for the tax period. If even one condition is broken, the provider of the personnel has a permanent establishment. The receiving party, meanwhile, pays social tax on the income of such personnel (see the section on employees).

Joint activity. Where a foreign company operates under a simple partnership contract, the activity of each participant creates a permanent establishment, and each of them discharges its tax obligations independently.

The date from which a permanent establishment arises

A permanent establishment is created from the date the activity begins in Uzbekistan, not from the date of registration and not from the date of the first income. The start date is the date of:

• conclusion of a contract for the supply of services in Uzbekistan (including under a joint activity agreement), for granting authority to act on the company's behalf, for purchasing goods in Uzbekistan for use or sale here, or for acquiring services in order to supply services in Uzbekistan;
• conclusion of the first employment contract for work in Uzbekistan;
• arrival in Uzbekistan of a non-resident individual, or the hiring of an employee or other personnel to perform the contract.

Where several conditions are met, the earliest date is taken, but no earlier than the first of the dates on which the employment contract was concluded or the personnel arrived. In practice this means that a contract signed with an Uzbek customer does not yet start the clock while the company has nobody in the country; but as soon as an employee lands, the contract date becomes the start date.

Three things are counted from the start date at once: the 183-day threshold, the deadline for filing the registration application, and the period over which the 10%-of-income fine accrues if the deadline is missed.

Registering a permanent establishment with the tax authority

A foreign company whose activity creates a permanent establishment must register with the tax authority at the place where the activity is carried out (Arts. 128 and 130 of the Tax Code). Registration is free of charge; the supporting document is the taxpayer identification number certificate.

The application must be accompanied by originals or notarised copies, translated into the state language, of:

1. the document confirming the company's state registration in its country of incorporation (an extract from the commercial register, a certificate of incorporation);
2. special permits or licences, if any;
3. a power of attorney or other document confirming the right to act on the company's behalf in Uzbekistan, if any;
4. the contract whose performance leads to the creation of the permanent establishment, if any.

A participant in joint activity instead attaches notarised copies of the joint activity agreement and of the document confirming the company's registration, showing its registration number.

The application is filed through a Public Services Center, the Unified Portal of Interactive Public Services or the electronic tax services portal (non-residents use a dedicated form); the tax authority registers the company, enters the details in the Unified Register of Taxpayers within three working days and issues a registration certificate bearing a QR code (Cabinet of Ministers Resolution No. 150 of 02.04.2022). It is this certificate that the permanent establishment then shows to its customers so that they do not withhold tax at source. Where a company has two or more permanent establishments within the area of one tax authority, a single establishment is registered for the whole group; the same or similar activity in another place creates a separate permanent establishment, registered from the date the activity begins there.

This section covers registration with the tax authority only. If the company decides to set up a subsidiary LLC instead, see the article on business registration: it shows how a foreign founder registers a company online, what charter capital an enterprise with foreign investment needs, and what to do about the PINFL and the electronic signature.

The fine for operating without registration

Carrying on activity that creates a permanent establishment without registering with the tax authority attracts a fine of 10% of the income received from the date the activity began until the date of actual registration, but not less than 10 million soums (Art. 219 of the Tax Code). The fine is calculated on all income for the period of delay, not on profit alone.

Until the company registers, its Uzbek customers must withhold tax at the source of payment under the rules for non-residents without a permanent establishment — 20% on most types of income. Once registration is completed, the tax withheld is credited against the permanent establishment's liabilities, but only where documents evidencing the withholding are available. If the customer knew of the indicators of a permanent establishment and applied a treaty exemption, it must pay the unwithheld tax and the late payment interest out of its own funds.

Late payment interest accrues on the unpaid amount at 1/300 of the Central Bank refinancing rate for each day of delay (Art. 110 of the Tax Code). The limitation period for holding a taxpayer liable for a tax offence is three years (Art. 217 of the Tax Code). Beyond that, the general sanctions apply: concealment of the tax base — 20% of the concealed amount; non-payment of tax — 20% of the unpaid amount; breach of the VAT registration procedure — 5% of income, with a floor of 5 million soums. For late filing of tax reports an officer of the company pays an administrative fine of 4.400.000 soums (10 BRV, the base calculation unit, under Art. 175 of the Code of Administrative Liability), and a bank will not open an account without the tax registration certificate.

Corporate income tax of a permanent establishment

A permanent establishment calculates and pays corporate income tax itself under the general rules, with the special features of Chapter 49 of the Tax Code; it is vested with all the rights of a taxpayer. The rate is 15%, the same as for ordinary companies (Art. 337 of the Tax Code). Turnover tax is not available: only Uzbek legal entities, individual entrepreneurs and self-employed persons are recognised as its payers.

What income is included

The total income of a permanent establishment comprises (Art. 347 of the Tax Code):

• income from the activity carried out through the permanent establishment in Uzbekistan;
• income from owning, using and disposing of its property;
• income of the company itself and of its subdivisions in other countries from activity in Uzbekistan that is identical or similar to the activity carried on through the permanent establishment;
• other income from sources in Uzbekistan attributable to the permanent establishment (interest, royalties, rent);
• income from sources abroad connected with the activity of the permanent establishment.

Income is determined on a separate-enterprise basis: if a project is performed partly abroad, or if the permanent establishment's goods are sold by another subdivision of the company, the establishment is attributed the income it would have earned as a distinct and independent person under the same conditions. Exchange differences on settlements with the head office are not recognised as income or expense. Where a permanent establishment carries on preparatory or auxiliary activity in the interests of third parties without remuneration, the tax base is determined as 20% of the expenses of that activity. Where there are several permanent establishments, the base and the tax are calculated for each of them separately.

What expenses are deductible

Expenses directly connected with earning income through the permanent establishment are deductible, whether they were incurred in Uzbekistan or outside it (Art. 348 of the Tax Code). Amounts that the permanent establishment pays to its own head office are not deductible:

• royalties, fees and other payments for the use of the company's property or intellectual property;
• payment for services rendered by the company to its permanent establishment;
• interest on loans granted by the company to the permanent establishment;
• management and general administrative expenses of the head office that are not connected with the activity in Uzbekistan.

Management and general administrative expenses of the head office (management, and the remuneration of managerial staff not engaged in production) may be deducted only where a double tax treaty with the company's country allows it. The procedure is approved by Cabinet of Ministers Resolution No. 111 of 10.03.2022: the company chooses one of two methods for the whole tax period and states it in an annex to its tax report. Under the proportional allocation method the expenses are multiplied by a calculated ratio — the share of the permanent establishment's income in the company's total income, or the average of three shares (income, fixed assets and payroll costs). This requires a report on the activity in Uzbekistan and the head office's financial statements with those indicators shown as separate lines, plus the auditor's opinion where an audit has been carried out. The direct attribution method is used where the head office keeps separate records of its expenses and of each permanent establishment on the basis of primary documents.

Tax on net profit

The net profit left with the permanent establishment after corporate income tax is treated as a dividend and taxed at 10% (Arts. 347 and 353 of the Tax Code). The current year's net profit is reduced by losses of prior years of the same permanent establishment, if they have not been taken into account before. Where a double tax treaty provides a reduced rate for dividends, the permanent establishment may apply it under the procedure of Art. 357 of the Tax Code; if the treaty sets several rates, the lowest is taken. The tax on net profit is payable no later than the deadline for filing the annual tax report.

A worked example

Over the year a permanent establishment earned income of 2,000 million soums and incurred deductible expenses of 1,600 million soums. Corporate income tax: (2,000 − 1,600) × 15% = 60 million soums. Net profit: 400 − 60 = 340 million soums. Tax on net profit: 340 × 10% = 34 million soums. The total paid to the budget is 94 million soums, or 23.5% of the profit. If the treaty with the company's country caps the tax on dividends at 5% and residence is confirmed, the second payment comes to 17 million soums and the overall burden to 19.25%.

Reporting and payment

A permanent establishment may credit corporate income tax paid abroad on income that is also taxed in Uzbekistan, subject to three conditions: there is an international treaty with that country; there is a certificate from the competent authority confirming payment, translated into the state language; and the credit does not exceed the Uzbek tax for the same period (Art. 342 of the Tax Code).

This section covers only what is specific to a permanent establishment. The general corporate income tax rules — what makes up total income, depreciation, non-deductible expenses, loss carry-forward — are set out in the article on corporate income tax and turnover tax; it is worth turning to when you start calculating the base.

Withholding tax on non-resident income

Where there is no permanent establishment, a foreign company's income from sources in Uzbekistan is taxed at the source of payment: the Uzbek payer (a legal entity, an individual entrepreneur, or the permanent establishment or representative office of another non-resident) withholds the tax on each payment (Arts. 351–354 of the Tax Code). It is this chapter that applies to one-off consultations, licences, loans and dividends, and to the income of a permanent establishment before it is registered.

The tax is calculated in soums at the Central Bank rate on the payment date and paid no later than the day after the payment; the agent files its report by the 20th day of the following month (Art. 355 of the Tax Code). A payment means not only a transfer of money but also a set-off, novation, debt forgiveness or transfer of property. If the agent fails to withhold the tax, it pays the tax and the late payment interest out of its own funds.

The tax agent does not withhold the tax where the non-resident has notified it that the income relates to its permanent establishment and has produced the tax authority's registration certificate; where the rate is 0%; and where the income is exempt under an international treaty and the non-resident has produced confirmation of residence. That certificate is therefore the first thing to ask a registered permanent establishment for: without it the customer will withhold 20%.

Where a non-resident sells shares, participation interests or real estate in Uzbekistan, the tax on the difference between the sale price and the documented purchase price is paid before the title is registered by the buyer acting as agent, and the registering authority records the transfer of title only against the tax authority's certificate of payment (Art. 356 of the Tax Code).

VAT for a permanent establishment

Foreign companies operating through a permanent establishment are recognised as VAT payers on the same footing as Uzbek legal entities, with no revenue threshold (Art. 237 of the Tax Code). Turnover is determined on the basis of the permanent establishment's activity and the rate is 12%. A permanent establishment goes through special VAT registration; breach of that registration procedure attracts a fine of 5% of income, with a floor of 5 million soums.

If a foreign company is not registered and the place of supply of its services is Uzbekistan, VAT on its behalf is charged and paid by the customer as a tax agent (Art. 255 of the Tax Code). As a general rule the place of supply of services is determined by the customer: if the customer is registered in Uzbekistan, or the services were acquired through its permanent establishment, VAT arises here. Construction, installation and design services are tied to the location of the real estate, while training and events are tied to the place where they are actually held. If the contract is drawn up without VAT, the agent charges the tax on top of the price at its own expense; the VAT paid by the agent may be credited. The permanent establishment itself also acts as a tax agent when it buys services from other non-residents.

This section covers VAT only as it applies to a permanent establishment. VAT registration, crediting of input tax and refunds on export are set out in the article on value added tax. If a foreign company sells software, subscriptions, advertising or hosting into Uzbekistan without a physical presence, see the article on VAT on digital services: it shows when such a company must register itself and pay the tax quarterly.

Employees of a permanent establishment: personal income tax and social tax

A permanent establishment is a tax agent for personal income tax in respect of its employees, like any Uzbek employer (Art. 386 of the Tax Code). The rate depends on the employee's tax status, not on their citizenship. An individual is a resident if they are present in Uzbekistan for more than 183 days in any consecutive 12-month period beginning or ending in the tax year (Art. 30 of the Tax Code); on application, supported by a long-term employment contract, resident status can be obtained earlier.

The difference between the two statuses lies in the reliefs: for a non-resident the tax base is determined without deductions or exemptions (Art. 366 of the Tax Code). An employee who becomes a resident during the year may recalculate and recover the tax paid while a non-resident, through the annual income declaration.

The permanent establishment pays social tax at 12% on its payroll costs (Art. 405 of the Tax Code). The object of social tax also includes the income of foreign personnel paid to a non-resident under a contract for the provision of personnel; the base is at least 90% of the total cost under that contract (Arts. 403 and 404 of the Tax Code). Personal income tax and social tax reports are filed monthly by the 15th day, and for the year by 15 February; the tax is paid no later than the same deadlines.

This section covers payroll taxes only. A foreign employee of a permanent establishment needs a work permit and a confirmation of the right to work; the article on the work permit shows which category of specialists they fall into, what the employer arranges and when no permit is required. The rules on withholding personal income tax and the reliefs available to residents are set out in detail in the article on social tax and personal income tax.

Other taxes and obligations of a permanent establishment

• Property tax. Non-resident legal entities that own real estate in Uzbekistan pay property tax (Art. 410 of the Tax Code). The object is buildings, structures and construction in progress beyond the standard construction period. A permanent establishment makes advance payments in the same way as Uzbek companies; a non-resident without a permanent establishment pays once a year, no later than 15 February (Art. 417 of the Tax Code).
• Land tax. The payers are legal entities, including non-residents, that hold land plots by right of ownership, possession, use or lease (Art. 425 of the Tax Code). Rates and reliefs are covered in the article on property tax and land tax.
• Tax agent. A permanent establishment withholds tax at source on the income of other non-residents and pays VAT for non-residents that are not registered (Arts. 255 and 352 of the Tax Code).
• Transfer pricing. Transactions between a permanent establishment and its head office or related parties are subject to price control; underpayment of tax caused by non-arm's-length terms is punished by a 40% fine. The notification of controlled transactions and the advance pricing agreement are described in the article on transfer pricing.
• Bank account and electronic signature. The permanent establishment's account is opened with an Uzbek bank under the Law on Currency Regulation; it is from this account that amounts awarded in disputes over the foreign company's activity through the permanent establishment are recovered (Resolution of the Plenum of the Supreme Court No. 27 of 20.11.2023). A bank opens the account only against the tax registration certificate: for a breach, the bank officer pays a fine of 5 to 10 BRV. Reports are filed through the taxpayer's personal cabinet, which is accessed with an electronic digital signature; the key is issued by the Public Services Center for a fee (Art. 56 of the Tax Code).

Double tax treaties

An international treaty prevails over the Tax Code and applies to tax residents of the contracting states (Art. 6 of the Tax Code). For a permanent establishment, a treaty matters at four points.

The threshold for creation. Most of Uzbekistan's treaties define a permanent establishment on the OECD model: a construction site, an installation project and supervision create one where they last more than 12 months (for example, the treaty with Kazakhstan of 12.06.1996), rather than 183 days. Services through personnel under the same treaty create a permanent establishment where their aggregate duration exceeds 12 months. Some treaties set a shorter threshold: 6 months in the treaty with Azerbaijan and 6 months in the treaty with Tajikistan of 09.03.2018, and 6 months extendable to 12 at the contractor's request under the treaty with Poland. The threshold has to be checked against the specific treaty; where there is no treaty, the Code's 183-day rule applies.

Attribution of profit. The company's profit is taxed in Uzbekistan only to the extent that it is attributable to the permanent establishment (the wording of the treaty with Turkmenistan, repeated in the others), and is determined as if the establishment were a separate enterprise. The treaties expressly allow the deduction of the head office's management and general administrative expenses and just as expressly prohibit the deduction of royalties, service commissions and interest on loans in favour of the head office. Purchasing goods for the head office does not generate profit for the permanent establishment.

Reduced rates and exemption. A tax agent applies the exemption or the reduced treaty rate itself if the recipient produced a document confirming tax residence no later than the payment date (Art. 357 of the Tax Code). For dividends, interest and royalties the recipient must be the beneficial owner of the income: an intermediary with limited powers that passes the income on does not get the benefit (Art. 6 of the Tax Code). Residence is evidenced by an original bearing an apostille or consular legalisation, a notarised copy of it, or a paper copy of an electronic document taken from the competent authority's website; legalisation is not required where the document is published on the competent authority's website (Art. 358 of the Tax Code). If the document does not state a period, it is valid for the calendar year of issue. Tax withheld in excess is refunded through the tax authority.

A permanent establishment cancels the exemption. If a tax agent has established that the non-resident's activity on a project creates a permanent establishment, it may not apply the treaty exemption and must withhold the tax. The courts decide disputes the same way: the regular supply of services in Uzbekistan under a long-term contract has been held to constitute a permanent establishment, and the refusal of the exemption lawful.

This section covers only how treaties affect a permanent establishment. The list of countries with which Uzbekistan has treaties in force, and the general rules for applying them, are given in the article on tax incentives and international double tax treaties; it is worth looking at before you ask a counterparty for a certificate of residence.

Permanent establishment, representative office, branch or LLC: which to choose

A permanent establishment is a status, not a form of presence. A foreign company chooses between three forms: an accredited representative office, a branch or a subsidiary LLC. A permanent establishment arises automatically for the first two if they carry on business activity, and does not arise for an LLC, because an LLC is an independent resident of Uzbekistan.

Under the Civil Code a representative office represents and protects the interests of a legal entity, while a branch performs all or part of its functions, including those of a representative office; neither is a legal entity (Art. 47 of the Civil Code). A branch and a representative office are registered on the basis of accreditation data transmitted by the Ministry of Investment, Industry and Trade; a separate application is filed only where the company operates through other separate subdivisions (Art. 129 of the Tax Code). A representative office that has gone beyond preparatory activity — by signing contracts or supplying services for a fee, for example — creates a permanent establishment with all the consequences described in the section on fines.

This section is only a comparison of the forms. If the choice falls on a subsidiary, the article on the limited liability company explains who may be a founder, how the charter capital is formed and how profit is distributed, while the article on business registration shows how a foreign founder goes through registration.

What changed in 2025–2026

• From 01.01.2026 — the threshold for monthly advance payments of corporate income tax was raised to 20 billion soums of total income for the previous year (ZRU-1108 of 25.12.2025); permanent establishments with lower income pay the tax on quarterly results only.
• From 01.01.2026 — only Uzbek legal entities, individual entrepreneurs and self-employed persons are recognised as turnover tax payers (ZRU-1108 of 25.12.2025); the regime remains unavailable to a permanent establishment.
• 19.08.2025 — UP-138 of 19.08.2025 instructed that the administrative fine for late reporting by officers of small businesses be cut from 10 to 3 BRV and not applied to delays of up to 5 days; until the Code of Administrative Liability is amended, 10 BRV applies.
• From 01.01.2026 to 01.01.2030 — foreign contractors engaged on projects of the Culture and Art Development Foundation and of residents of the Creative Industry Park are exempt from VAT, withholding tax and personal income tax on works and services directly connected with the creative industry (Art. 483 of the Tax Code).
• From 01.01.2026 — a special tax regime was introduced for foreign citizens: on payment of a special fee of 50 thousand US dollars and opening an account with an authorised bank, income from sources outside Uzbekistan is exempt from personal income tax, and an individual who is in the country for more than 30 days and has housing is treated as a resident (UP-180 of 04.10.2025). This is a regime for individuals; it does not affect a company's permanent establishment.
• From 01.07.2026 — UP-95 of 19.05.2026 abolished the obligation to file amended reports over discrepancies found in pre-audit analysis; taxpayers of medium risk are sent a notice, and if the shortcomings are remedied within a month no audit is carried out.

Frequently asked questions

Does remote work for an Uzbek customer create a permanent establishment?

No, provided the foreign company's employees are physically outside Uzbekistan: a permanent establishment requires a fixed place of business in Uzbekistan or personnel supplying services here for at least 183 days. Such a company's income is taxed at the source of payment at 20% unless the treaty with its country exempts it. The position changes as soon as an employee travels to Uzbekistan or a local person is given the right to sign contracts on the company's behalf.

Is registration required if the project is shorter than 183 days?

The registration application is due no later than 183 days from the start of the activity, so for a project shorter than that no obligation arises in respect of a construction site or services, provided the term is not extended and there are no other indicators of a permanent establishment. But if the contract was concluded from the outset for a term of more than 183 days, the application is filed within 30 days of the start of the work, without waiting for six months to run. Periods under connected projects and related companies are added together.

How can a customer avoid withholding 20% on payments to a permanent establishment?

By asking the non-resident for a notification that the income relates to its permanent establishment and for the tax authority's registration certificate. Without those documents the customer must withhold tax at source at the rates in Art. 353 of the Tax Code; the amount withheld is then credited to the permanent establishment once it is registered, but only against documents evidencing the withholding.

Can head office expenses of managing the permanent establishment be deducted?

Only if the double tax treaty with the company's country allows such a deduction; without a treaty, the head office's management and general administrative expenses are not deductible. The method — proportional or direct — is chosen for the year and supported by a report on the activity in Uzbekistan and the head office's financial statements under Cabinet of Ministers Resolution No. 111 of 10.03.2022. Payments to the head office for services, royalties and interest on its loans are not deductible under either method.

Does a permanent establishment pay tax on net profit if the profit is not transferred abroad?

Yes. The net profit after corporate income tax is treated as a dividend and taxed at 10% whether it is remitted to the head office or stays in Uzbekistan; the tax is paid by the annual reporting deadline. A reduced treaty rate applies where residence is confirmed, and prior-year losses of the same establishment reduce the base.

How does a permanent establishment differ from a representative office?

A representative office is an accredited subdivision for preparatory and auxiliary activity that carries out no commercial operations and pays only the taxes on its employees' salaries. A permanent establishment is a tax status that arises from the fact of business activity in Uzbekistan; it can arise for a representative office too, once it starts concluding contracts or supplying services for a fee, and for a company with no accreditation at all.