Transfer pricing in Uzbekistan

Transfer pricing means conditions between related parties that differ from market conditions. If a party loses income because of those conditions, the Tax Committee may recognize that income for tax purposes and adjust the tax base under the Tax Code rules (art. 176 TC).

In brief:

• The threshold for ordinary transactions between related residents is more than UZS 5 billion (art. 180 TC) in a calendar year.
• A UZS 500 million threshold (art. 180 TC) applies to certain domestic transactions.
• Documentation requested during an audit must be supplied within 30 calendar days (art. 195 TC).
• A business should maintain a related-party and transaction register, explain its chosen method, and retain its arm’s-length range calculation.

Updated: 05 September 2026

What transfer pricing means in simple terms

The rules compare a transaction with the terms on which independent persons would have agreed in comparable economic conditions. The Code examines the price, the commercial and financial conditions, and the results of the related parties’ activities. In foreign trade, foregone income may also be recognized when the parties are independent.

Transfer-pricing control covers five taxes (art. 176 TC):

• corporate income tax;
• personal income tax;
• subsoil use tax;
• value added tax (VAT);
• excise tax.

For subsoil use tax, the transaction must concern a mineral subject to an ad valorem rate. For VAT and excise tax, control applies when one party is a legal entity or individual entrepreneur that does not pay the relevant tax. Transactions between a special economic zone participant and a person outside the zone may also be reviewed.

The price in a controlled transaction is treated as a market price unless the Tax Committee proves otherwise or the taxpayer makes a voluntary adjustment. Prices in independent transactions, lawful exchange trades, antimonopoly orders, and a pricing agreement (art. 178 TC) are also treated as market prices.

Who is treated as a related person

Persons are related when features of their relationship allow one to influence transaction terms or results, or the economic results of their activities. The Code provides a complete list of cases (art. 37 TC):

• one legal entity directly or indirectly owns more than 20% of another legal entity;
• an individual directly or indirectly owns more than 20% of a legal entity;
• the same person directly or indirectly owns more than 20% of each of two legal entities;
• a person may appoint the sole executive body or at least 50% of the collegial executive body or board of directors;
• at least 50% of the bodies of two legal entities were appointed by the same person;
• more than 50% of the bodies of two legal entities consist of the same individuals;
• a person exercises the powers of a legal entity’s sole executive body;
• the same person acts as the sole executive body of several legal entities;
• in a chain of direct ownership, every preceding person owns more than 50% of the next legal entity;
• one individual is subordinate to another by virtue of official position;
• an individual is related to a spouse, parents, the spouse’s parents, children, full or half siblings, guardian, custodian, or ward.

An individual’s holding includes the aggregate holding of the listed family members. Market dominance or state participation does not by itself create related-party status. A court may find persons related on another ground if the required influence exists.

Example. Company A directly owns 30% of Company B. Because the assumed holding exceeds the statutory 20% threshold, the companies fall within the related-person list. This does not automatically result in a tax adjustment: the parties must next determine whether the transaction is controlled and then test its conditions.

Which transactions are controlled

Controlled transactions include related-party transactions subject to the thresholds and exceptions, as well as certain foreign-trade transactions. For two Uzbekistan tax residents, the following tests apply (art. 180 TC):

The annual threshold is calculated by aggregating transactions with one person and persons related to it. A chain through a formally independent intermediary is treated as a direct related-party transaction if the intermediary merely arranges the resale, assumes no risks, and uses no assets. A court may combine homogeneous transactions fragmented to avoid the tests.

A narrow exception applies to an interest-free loan. It is not a controlled transaction if every party and beneficiary is an Uzbekistan tax resident and all obligations are performed only in Uzbekistan.

For foreign trade, the following are separately controlled (art. 181 TC):

• globally exchange-traded commodities: non-ferrous metals, precious metals, mineral fertilizers, hydrocarbons and petroleum products, cotton fibre, and cotton yarn;
• a transaction in which a party is registered, resident, or tax-resident in an offshore jurisdiction.

An offshore jurisdiction is one that grants a preferential tax regime and/or does not disclose information on financial transactions. The list is jointly approved by the Tax Committee, the customs authority, and the Central Bank. Cross-border related-party transactions are also covered by the general rule in Article 180 governing transactions between related persons.

Example. Two related resident companies enter into three ordinary transactions in a year for UZS 1.8 billion, UZS 2 billion, and UZS 1.6 billion. The total is UZS 5.4 billion and exceeds the UZS 5 billion threshold. If one party has a tax benefit, two transactions for UZS 320 million and UZS 300 million total UZS 620 million and exceed the special UZS 500 million threshold.

This article does not cover taxation of controlled foreign company profits. That regime tests whether a share of foreign profit must enter the tax base, rather than whether a particular transaction is at arm’s length. The rules on participation, profit exemptions, and the separate notification appear in the article on controlled foreign companies. A foreign-structure owner may need that article even when there is no controlled transaction.

How to determine a market price and comparability

Transactions are comparable when their commercial and financial conditions are the same. Differences are permitted if they are immaterial or their effect can be removed through reasoned adjustments (art. 183 TC).

The comparability analysis considers the conditions and characteristics (art. 184 TC): quantity and volume, performance period, payment terms, currency and exchange rate, allocation of rights and duties, features of the goods or services, the contract, the parties’ functions, assets, risks, economic conditions, and market strategy. Market factors include geography and size, competition, homogeneous supply, demand, purchasing power, and infrastructure.

The range of functions examined is extensive. It includes design and development, production, assembly, installation, research, procurement, wholesale and retail trade, repairs and warranty service, marketing and advertising, storage and transport, insurance, financing, quality control, and operational and strategic management. For a loan, the parties’ credit history, solvency, term, currency, and other interest-rate factors also matter.

Sources must make the analysis reproducible. The Tax Committee uses exchange and other data (art. 185 TC): exchange quotations, customs statistics, official and public sources, price-reporting agencies, and the taxpayer’s own transactions. Another person’s tax secrets cannot be used as a closed comparable; a taxpayer may use public information and data on related persons carrying on similar activities.

Where prices are regulated, prescribed prices and agreed formulas are treated as market prices. Price floors and ceilings, mark-ups, discounts, and profitability limits are taken into account when adjusting the arm’s-length range boundaries (art. 179 TC).

Which transfer-pricing methods apply

The Code establishes five methods (art. 186 TC) and permits a combination. The comparable uncontrolled price method has priority; another method is used when the priority method cannot be applied or does not support a reasoned conclusion.

A profitability range is normally based on at least four (art. 187 TC) comparable transactions or companies. The Code permits fewer where four are unavailable. The sample must reflect the industry, functions, assets, and risks.

Example. A company sells 1,000 units of goods to a related party for UZS 80,000 each. Comparable transactions produce an arm’s-length range of UZS 95,000–105,000, with a midpoint of UZS 100,000. The actual price is below the range, so the illustrative income adjustment is (UZS 100,000 − UZS 80,000) × 1,000 = UZS 20 million. The relevant tax is then calculated from the adjusted tax base under the rules for that tax.

How to file a controlled-transaction notification

The taxpayer sends the notification to the tax authority at its place of registration no later than the annual financial-reporting deadline for the transaction year. The notification must contain (art. 182 TC):

• the calendar year;
• the subject of the controlled transactions;
• the legal entity’s full name and taxpayer identification number, the individual entrepreneur’s details, or the individual’s full name and citizenship;
• income and expenses, including losses, with regulated-price amounts stated separately.

Information may be prepared for a group of homogeneous transactions. The taxpayer may submit a corrected notification if the original is incomplete, inaccurate, or erroneous. The Code permits paper and electronic forms under the prescribed procedure, so the taxpayer should use the current form in its online account rather than a saved form from a previous year.

What transfer-pricing documentation must contain

Documentation substantiates the price and the entire analytical process. It may be one document or a set of documents in free form unless legislation prescribes a form. It must disclose the following (art. 193 TC):

• the parties and their states of tax residence;
• the transaction, its terms, pricing approach, and payment terms and timing;
• the parties’ functions, assets used, and risks assumed;
• the selected method and the reasons for selecting it;
• information sources and the comparable-transaction selection process;
• the arm’s-length price or profitability range calculation;
• income, expenses, losses, and actual profitability;
• benefits from information, intellectual property, and identifiers, where relevant;
• market strategy and other price factors;
• voluntary adjustments made by the taxpayer.

The Tax Committee may request this documentation no earlier than 1 June of the year following the transaction year. The requirement does not apply to uncontrolled transactions, prescribed or regulated prices, certain securities and derivatives traded on an organized market, or transactions covered by a pricing agreement. A taxpayer may still provide support voluntarily in those cases.

How transfer-pricing control is conducted

The Tax Committee conducts the arm’s-length review centrally at its own location. A territorial tax authority or the interregional inspectorate for large taxpayers may not make the arm’s-length character of a price the subject of its audit. A notification, a territorial authority’s report, or a controlled transaction found during another audit can trigger the review.

Normally, only one audit (art. 194 TC) is permitted for the same transaction or group in the same calendar year. A repeat audit is possible where an amended return reduced tax or increased a loss, or where information was found to be unreliable. The review period covers no more than the three calendar years preceding the year of the audit decision.

The principal deadlines are set by the Code (art. 195 TC):

If the taxpayer applied a Code method, the Committee must use the same method unless it proves that the method cannot support a reasoned conclusion. The audit report must document that the price fell outside the range, connect that result to the tax shortfall or overstated loss, and show the calculation.

A taxpayer that underpays tax because of non-comparable conditions in a controlled transaction is subject to a 40% penalty (art. 226 TC) on the unpaid tax. Example. If the tax shortfall after adjustment is UZS 60 million, the penalty under this rule is UZS 60 million × 40% = UZS 24 million.

How to make a voluntary tax-base adjustment

After the end of the calendar year, a taxpayer may voluntarily increase the tax base or tax and reduce an overstated loss. The transaction must be identified in the explanation attached to the amended return. A legal entity adjusts by the corporate income tax filing deadline; an individual adjusts by the annual aggregate-income declaration deadline.

The voluntarily identified shortfall must be paid by the payment deadline for the relevant annual tax. Until that date, late-payment interest does not accrue (art. 177 TC) for the period beginning when the amended-return liability arose. Actual transaction prices may be used for advance and current calculations within the calendar year.

How to conclude a pricing agreement

An Uzbekistan legal entity classified as a large taxpayer may conclude a pricing agreement. It prospectively fixes the transactions, goods or services, pricing rules or methods, information sources, term, and compliance documents. The parties may agree additional terms (art. 196 TC).

For a foreign-trade transaction, the competent authority of another state may participate if a double taxation agreement is in force. Several related Uzbekistan legal entities may conclude a multilateral agreement (art. 197 TC) for homogeneous transactions.

An agreement may run for up to 3 years, may cover the period beginning on 1 January of the application year, and ordinarily takes effect on 1 January of the following year. If its conditions are observed, it may be extended for up to 2 years (art. 198 TC).

The application requires a complete package (art. 199 TC):

• a draft pricing agreement;
• documents on the business and controlled transactions;
• copies of constituent documents;
• a copy of the tax-registration certificate;
• financial statements for the latest reporting period;
• other relevant documents.

The Committee reviews the package within 6 months and may extend the period to 9 months. It sends its decision within 5 days; a revised draft is reviewed within 3 months. An incomplete package or a finding that the proposed approach will not produce market prices may lead to refusal.

When a taxpayer complies with the agreement, the Committee may not assess additional tax, interest, or penalties or reduce a loss for covered transactions. This protection applies (art. 200 TC) only within the agreed conditions.

An agreement ends when its term expires, by agreement of the parties, by court order, or early by a Committee decision following a breach that caused a tax shortfall. A termination decision may be appealed (art. 201 TC). A change in tax legislation does not alter the agreement’s procedural terms, but the parties may amend it if the law affects the business and its pricing (art. 202 TC).

How to prepare for transfer-pricing control

Preparation starts before the transaction because the taxpayer may later have to explain the actual allocation of functions, assets, and risks. A working file for each homogeneous transaction group should allow another specialist to reproduce the calculation from primary records to the arm’s-length range.

A practical sequence is:

• map direct and indirect ownership, appointment powers, and relevant family relationships;
• maintain a transaction register for each counterparty and related group with a running calendar-year total;
• flag special regimes, SEZ status, tax benefits, minerals, exchange-traded commodities, and offshore jurisdictions;
• record contractual terms, payments, currency, functions, assets, and risks before selecting comparables;
• retain the original quotation or financial-data extract, selection criteria, and every comparability adjustment;
• choose a method and record why the priority method applies or why another method is needed;
• reconcile the register with the notification, annual financial statements, and tax base;
• calculate any voluntary adjustment and identify the transaction in the amended-return explanation.

This working file does not replace documentation submitted on request, but it provides a reproducible foundation and reduces discrepancies between the notification, method calculation, and accounting records.

Frequently asked questions

What is a transfer price in simple terms?

It is a price formed between related parties and/or one that differs from the price independent persons would use in comparable conditions. For tax control, an unusual price is not enough by itself. The decisive question is whether the different conditions caused foregone income, reduced tax, or an overstated loss.

Does every related-party transaction automatically lead to an adjustment?

No. The parties first determine related-person status, then test the controlled-transaction criteria, annual threshold, and exceptions. The price or profitability is then compared with an arm’s-length range. The controlled-transaction price is treated as a market price until the Tax Committee proves otherwise or the taxpayer makes a voluntary adjustment.

When should transfer-pricing documentation be prepared?

The functional analysis and calculation should be developed with the transaction, even though the Tax Committee may request the documentation no earlier than 1 June of the following year. Once a request is received during an audit, only 30 calendar days remain. Reconstructing contracts, payments, risk data, and historical market sources within that period can be difficult.

Can the taxpayer correct a non-market price voluntarily?

Yes. After the calendar year ends, the taxpayer may file an amended return, increase the tax base or tax, or reduce an overstated loss. The transaction is identified in the accompanying explanation, and the shortfall is paid by the annual tax deadline. The special interest treatment applies only within the conditions of Article 177 of the Tax Code.

Why is a pricing agreement useful to a large taxpayer?

The agreement fixes covered transactions, methods, sources, and supporting documents in advance. If the taxpayer complies with it, the Tax Committee cannot assess tax, interest, or penalties for the agreed transactions. The process is lengthy: the initial review takes up to 6 months and can be extended to 9 months.