Tax incentives for business

Uzbekistan provides huge opportunities for businesses in the form of tax benefits. A tax incentive is an ability provided by the law not to pay taxes or to pay them in a smaller amount.

Tax incentives and their usage are tracked by tax authorities using digital systems. For specific tax incentives, it is necessary to submit a request to apply a tax incentive to tax authorities in advance at my3.soliq.uz.

Tax incentives for employment of persons with disabilities

A company, in which more than 3% of employees (annual average) are persons with disability, can reduce the applicable tax rate of corporate income tax by 1% for each percent of employees with disability in excess of that 3% threshold.

A company employing persons with disability, working in workshops and sites specifically designed for such persons, pays social tax at the rate of 4.7% (instead of standard 12%).

Tax incentives for exporters

Profits earned from the export of goods and services are taxed with corporate income tax at zero rate (0%), on the condition that the payment for export in foreign currency is received by the exporter within 180 calendar days from the date of export. This incentive does not apply:

• for the export of raw materials according to the list approved by the President of Uzbekistan
• for international transportation services (except for road transport)
• for transportation via pipelines, including gas pipelines

Goods exported abroad are subject to value added tax (VAT) at zero rate (0%). The VAT exemption also applies to the export of services to foreign companies located abroad, on the condition that the place of provision of the services must not be the territory of Uzbekistan.

For businesses under the turnover tax regime, earnings made from the export of goods and services are exempt from turnover tax.

Tax incentives for educational services

Profits earned from educational services, including testing and examination services, are taxed with corporate income tax at zero rate (0%). To apply this tax incentive, the share of income earned from educational services must not be less than 90% of the taxpayer's total income.

If the requirement for achieving 90% volume is not met in any tax period, the standard tax rate (15%) shall be applicable in that tax period.

The following categories of educational services are exempt from value added tax (VAT):

• daycare services for children in pre-school educational institutions
• extracurricular classes (including sports) for minors
• primary, secondary, secondary specialized, vocational, higher and postgraduate education
• retraining and advanced training of personnel provided by educational institutions
• testing and examination services

Tax base for property tax is reduced in respect of immovable property used for educational services.

Land plots occupied by educational facilities (buildings) are exempt from land tax.

Tax incentives for medical services

Profits earned from the following licensed medical services (except for cosmetology services) are taxed with corporate income tax at zero rate (0%):

• diagnostic, preventive and treatment services
• dental services, including dental prosthetics services

To apply this tax incentive, the share of income earned from medical services must not be less than 90% of the taxpayer's total income.

If the requirement for achieving 90% volume is not met in any tax period, the standard tax rate (15%) shall be applicable in that tax period.

The following are exempt from value added tax (VAT):

• caring services for the sick and elderly
• sale of prosthetic and orthopedic products, equipment for persons with disabilities
• services related to orthopedic prosthetics for persons with disabilities, repair and maintenance of prosthetic and orthopedic products and equipment for persons with disabilities
• sale of products from medical workshops at medical institutions
• healthcare services provided by sanatoriums, hospitals and health centers

Land plots occupied by healthcare facilities (except for health resort facilities located in tourist areas) are exempt from land tax.

Tax incentives for hospitality services

Sanatorium and resort services provided by sanatoriums, hospitals, resorts, boarding houses, inns and other recreation areas, children's summer camps are exempt from value added tax (VAT).

Tax base for property tax is reduced in respect of immovable property used for healthcare resort services (except for health resort facilities located in tourist areas).

The following land plots are exempt from land tax:

• land plots provided to institutions and organizations for the organization of mass recreation and internal tourism
• land plots occupied by children's summer camps

Tax incentives for sports

Profits earned from the following sports-related services are taxed with corporate income tax at zero rate (0%):

• physical education and sports classes in sports facilities, schools, health clubs, as well as general physical training services
• holding sports competitions and sports events, as well as the lease of sports facilities for the preparation and holding of such events
• lease of sports equipment, exercise machines, inventory, sports uniforms

To apply this tax incentive, the share of income earned from sports services must not be less than 90% of the taxpayer's total income. If the requirement is not met in any tax period, the standard tax rate (15%) shall be applicable in that tax period.

Extracurricular classes with minors in sports clubs and sections are exempt from value added tax (VAT).

Tax base for property tax is reduced in respect of physical culture and sports facilities (buildings).

Land plots occupied by sports and fitness complexes and training bases are exempt from land tax.

Tax incentives for e-commerce

Taxpayers engaged in the e-commerce of goods and services are taxed with corporate income tax at 7.5% tax rate (instead of standard 15%). To apply this tax incentive, the share of income earned from e-commerce must not be less than 90% of the taxpayer's total income.

E-commerce entities under the turnover tax regime pay turnover tax at 2% tax rate (instead of standard 4%). To apply this tax incentive, the share of income earned from e-commerce must not be less than 90% of the taxpayer's total income.

E-commerce is the sale of goods and services using websites and mobile apps. Certain categories of goods are not allowed to be traded through e-commerce, such as alcohol and tobacco products, precious and semi-precious stones.

Tax incentives for IT Park residents

Resident companies of the information technology park (IT-park) are exempted from all types of taxes and mandatory contributions to state funds, including social tax, until January 1, 2028.

Employees of the resident companies of the IT-park pay personal income tax at 7.5% tax rate (instead of standard 12%) until January 1, 2028.

See our article on IT-park residents.

Tax incentives for renewable energy

Renewable energy producers (solar, wind, etc.) are exempt from property tax on renewable energy installations of at least 0.1MW capacity for a period of 10 years from the date of commissioning of such installations.

Renewable energy producers are also exempt from land tax on land plots occupied with renewable energy installations of at least 0.1MW capacity for a period of 10 years from the date of commissioning of such installations.

Tax incentives for agricultural producers

Corporate income tax is levied on agricultural producers, fisheries, livestock, poultry, beekeeping and sericulture enterprises at zero rate (0%) on profits made from the sale of agricultural products of their own making that have not undergone industrial processing.

To apply this tax incentive, the share of income earned from the supply of agricultural products of own making must not be less than 90% of the total income of the agricultural producer for a relevant tax period.

Tax base for property tax is reduced in respect of real estate held by agricultural enterprises used for the production and storage of agricultural products, and for breeding silkworms.

The following land plots are exempt from land tax:

• newly developed agricultural land plots, for the period of development and subsequent 5 years in accordance with a project documentation approved by a relevant authority
• lands on which melioration works are carried out, for a period of 5 years from the start of works in accordance with a project documentation approved by a relevant authority
• lands on which new orchards, vineyards and mulberry trees have been planted, for a period of 5 years
• lands where water-saving irrigation technology has been implemented (such as drip, sprinkler, discrete irrigation), for a period of 5 years

Tax incentives in free economic zones

There are a number of special economic zones (SEZ) spread across all the regions of Uzbekistan to promote manufacturing, pharmaceuticals, agriculture and tourism.

Participants of a special economic zone (SEZ) shall be exempt from corporate income tax depending on the volume of investments as follows:

• from 3 million to 5 million US dollars, for a period of 3 years
• from 5 million to 15 million US dollars, for a period of 5 years
• over 15 million US dollars, for a period of 10 years

Participants of a special economic zone (SEZ) shall be exempt from property tax, land tax and special water use tax, depending on the volume of investment for a period determined by decisions of the President of Uzbekistan.

Tax incentives apply exclusively to the types of activities of a participant in a special economic zone (SEZ) as determined in an investment agreement concluded with an investor.

Investors in special economic zone reserve the right to make use of other tax incentives.

See our article on free economic zones.