Taxes

The Uzbekistan tax system is unified across the entire country and establishes a single economic space. The tax code of Uzbekistan is the primary source of taxes and taxation in Uzbekistan. Taxation is mandatory for all entities and individuals meeting the criteria defined in the tax code.

Taxpayers are required to register with the local tax authority, providing necessary information about their business activities and legal status.

Several taxes are levied in Uzbekistan, including:

1. Corporate income tax (CIT)
2. Turnover tax
3. Value added tax (VAT)
4. Social tax
5. Personal income tax
6. Property tax
7. Land tax
8. Excise tax
9. Water use tax
10. Subsoil use tax, and special rent tax for the extraction of minerals

General information on these taxes is provided below.

Corporate income tax

Corporate income tax (CIT) in Uzbekistan is typically levied on profits (total income less deductible expenses). The standard rate of CIT for residents is 15%. Specific categories of taxpayers are subject to different rates of CIT.

Taxpayers of corporate income tax include:

• resident companies with a total annual income exceeding 1 billion Uzbek soums, or engaged in the importation of goods to Uzbekistan
• individual entrepreneurs with a total annual income exceeding 1 billion Uzbek soums, or engaged in the importation of goods to Uzbekistan
• foreign companies, including those operating in Uzbekistan through permanent establishment, in respect of income earned from sources in Uzbekistan

The resident taxpayers of CIT are subject to value added tax (VAT) at the same time. This taxation regime is called the general taxation regime.

1 billion Uzbek soum threshold is a key factor for determining the applicable tax regime. Resident companies and individual entrepreneurs with a total annual income less than 1 billion Uzbek soums are eligible to pay turnover tax, instead of CIT and VAT.

Foreign companies are subject to CIT on income derived from sources in Uzbekistan. The standard rate of CIT for foreign companies is 20%, dividends payable to foreign companies are taxed at 10%. The tax treaties signed by Uzbekistan can influence the applicable tax rates for foreign companies, potentially providing for reduced rates or exemptions on certain types of income.

See our article on corporate income tax.

Turnover tax

Local compaines and individual entrepreneurs, whose annual income from selling goods and services does not exceed 1 billion Uzbek soums, can opt to pay turnover tax based on their total turnover (revenue).

The taxpayers on turnover tax are exempt from paying corporate income tax (CIT) and value added tax (VAT). If the taxpayer's total income surpasses the 1 billion Uzbek soum threshold during a calendar year, it must immediately transition to the general taxation regime, which includes paying CIT and VAT.

Turnover tax is not applicable to local companies importing goods to Uzbekistan, foreign companies, and in a few other cases.

The standard rate of turnover tax is 4%. Specific types of income are subject to different rates of turnover tax.

See our article on turnover tax.

Value added tax

Value added tax (VAT) is levied at multiple stages of the distribution and sales process. Taxpayers of VAT include:

• resident companies with a total annual income exceeding 1 billion Uzbek soums, or engaged in the importation of goods to Uzbekistan
• individual entrepreneurs with a total annual income exceeding 1 billion Uzbek soums, or engaged in the importation of goods to Uzbekistan
• foreign companies, including those operating in Uzbekistan through permanent establishment, conducting sales in the territory of Uzbekistan

Foreign companies providing electronic services to customers in Uzbekistan must submit tax reports to the local tax authority. Electronic services include access to internet search engines, sale of rights to use software and databases, advertising services on the internet, etc.

The rate of VAT is 12%. Specific goods, services and business activities are exempt from VAT.

Taxpayers engaging in VAT-taxable activities need to register specifically for VAT with tax authorities, which is a distinct registration process beyond general tax registration.

Taxpayers have the right to offset VAT paid on purchases (input VAT) against VAT collected on sales (output VAT). A mechanism exists for taxpayers to claim refunds for excess input VAT, potentially arising from exports and zero-rated supplies.

See our article on value added tax.

Social tax

Social tax is paid by employers based on their employees' wages. The tax base for the social tax is the employer's total payroll expenses. Business entities subject to social tax must pay the tax monthly.

The rate of social tax for business entities is 12%.

See our article on social tax.

Personal income tax

Individuals pay personal income tax on various types of income, including employment income, property income, and other income. This includes income such as wages, bonuses, allowances, and other payments related to employment. Property income includes interest, dividends, royalties, and income from the sales of property. Other sources of income subject to tax include prizes, lottery winnings, grants, income from creative works.

Resident individuals pay personal income tax on their worldwide income, while non-residents pay the tax on income from sources in Uzbekistan. A person shall be considered a tax resident of Uzbekistan if that person is physically present in the country for 183 days or more within a consecutive 12-month period.

The standard rate of personal income tax for residens and non-residents is 12%. Dividends payable to resident individuals are taxed at 5%, to non-residents at 10%. The tax treaties signed by Uzbekistan can influence the applicable tax rates for taxpayers, potentially providing for reduced rates or exemptions on income.

Personal income tax is typically calculated and withheld by employers at the source of income payment. Employers act as tax agents, deducting the appropriate tax amount from the employee's income and remitting it to the tax authorities.

Individuals must file an annual income declaration to report their total income from sources where tax was not withheld at the source.

See our article on withholding personal income tax.

Property tax

Property tax is levied on immovable property in Uzbekistan. Immovable property encompasses various assets, including buildings and structures registered with the local authorities, as well as unfinished construction objects where construction has not been completed within the timeframe specified in the project documentation.

The tax rates for property tax vary based on the type of the property. Commercial buildings owned by companies are subject to the annual tax rate of 1.5% of their average residual value. Unfinished construction objects are subject to the tax at the rate of 3%.

Some properties are fully exempt from property tax. In certain cases, a minimum value applies to property, meaning the tax base cannot be lower than this set amount.

See our article on property tax.

Land tax

Commercial companies and individuals possessing, using, or leasing land in Uzbekistan are subject to land tax. Most land falls under the scope of land tax, whether it's for agricultural purposes or non-agricultural purposes (e.g., commercial, industrial).

The tax base of non-agricultural land is the land's cadastral value, determined by a local state body. The tax base of agricultural land is the normative value of the land. The normative value is a pre-set value based on the quality and potential productivity of the land.

Land tax rates are set for different regions and adjusted locally. Specific categories of land are exempt from land tax.

See our article on land tax.

Excise tax

Excise tax is a type of tax levied on specific goods produced or sold within Uzbekistan. Excise tax is paid by:

• entities manufacturing excise-taxable goods within Uzbekistan
• entities bringing excise-taxable goods into Uzbekistan
• entities selling certain excise-taxable goods, like gasoline, diesel fuel, and gas, directly to consumers at gas stations

Excise-taxable goods include petroleum products, alcohol and tobacco products, and other products.

See our article on excise tax.

Water use tax

Companies using water from surface or underground sources for primary water use or consumption within Uzbekistan are subject to water use tax. Taxpayers of water use tax include foreign companies operating in Uzbekistan through permanent establishments.

Water resources utilized from surface and underground sources fall under the scope of water use tax. Certain water resources are excluded from the water use tax.

The tax base for water use tax is the volume of water used from surface and underground sources. The tax rates are typically expressed in Uzbek soums per cubic meter of water.

See our article on water use tax.

Subsoil use tax and special rent tax

Subsoil use tax is levied on individuals and companies that extract minerals from subsoil resources or recover minerals from technogenic mineral formations within Uzbekistan. The tax base for this tax depends on the type of mineral extracted.

The special rent tax for the extraction of minerals applies to the extraction of metals and hydrocarbon raw materials. The tax base for this tax is a rent income, which is typically calculated as the difference between the income from the sale of extracted metals or hydrocarbon raw materials (determined based on the market price) and the expenses directly related to their extraction.

See our article on subsoil use tax.