Skip to content

Uzbekistan

Country Name: Republic of Uzbekistan
Currency: Uzbekistani Som (UZS)
Primary Tax Authority: State Tax Committee of the Republic of Uzbekistan
Key Legislation:

  • Tax Code of the Republic of Uzbekistan (as amended)
  • Investment Law
  • Value Added Tax (VAT) Law
  • Customs Code

Fiscal Authority Allocation

Centralized Fiscal System:
Uzbekistan operates a centralized tax system. The State Tax Committee, under the Ministry of Finance, administers and collects taxes, including corporate income tax (CIT), personal income tax (PIT), value-added tax (VAT), and other indirect taxes.

Corporate Income Tax (CIT)

Standard Rate: 15%
Uzbekistan imposes a flat corporate income tax rate of 15% on resident companies and foreign companies with a permanent establishment in Uzbekistan. Small and medium-sized enterprises (SMEs) may benefit from reduced rates depending on turnover.

Corporate Forms and Taxation:

  1. Resident Companies: Taxed on worldwide income.
  2. Non-Resident Companies: Taxed only on Uzbekistan-sourced income.

Exemptions and Incentives:

  • Investment Incentives: Uzbekistan offers tax holidays, CIT exemptions, and reduced CIT rates for companies investing in priority sectors such as energy, agriculture, and manufacturing. These incentives include CIT exemptions for up to 10 years in Free Economic Zones (FEZs) and other priority regions.
  • Free Economic Zones (FEZs): Companies operating in FEZs benefit from tax holidays, exemptions from customs duties, and VAT exemptions.

Goods and Services Tax (GST) / Value-Added Tax (VAT)

Standard Rate: 15%
Uzbekistan imposes VAT at a standard rate of 15% on most goods and services. VAT is levied on domestic production and imports. Exported goods and services are zero-rated, allowing businesses to reclaim VAT on inputs used in the production of exports.

Exemptions:
Certain goods and services, including healthcare, education, and some agricultural products, are VAT-exempt. Businesses in certain industries or operating in specific economic zones may also benefit from VAT exemptions.

Personal Income Tax (PIT)

Flat Rate: 12%
Uzbekistan applies a flat personal income tax rate of 12% on both residents and non-residents. Residents are taxed on their worldwide income, while non-residents are taxed only on income earned in Uzbekistan.

Deductions and Allowances:
Limited deductions are available, such as for social security contributions and certain charitable donations.

Additional Mandatory Contributions

Social Security Contributions:
Employers and employees are required to contribute to the social security system, which covers pensions, healthcare, and unemployment benefits.

  • Employer Contribution: 12% of gross salary.
  • Employee Contribution: 8% of gross salary.

Withholding Taxes

  • Dividends: 10%
  • Interest: 10%
  • Royalties: 20%
    Uzbekistan imposes withholding taxes on payments to non-residents. These rates may be reduced under Uzbekistan’s double taxation agreements (DTAs).

Transfer Pricing Rules

Uzbekistan follows the arm’s-length principle for transactions between related parties. Companies must ensure that prices for related-party transactions reflect market rates, and transfer pricing documentation may be required for large multinational companies.

Special Tax Regimes

  • Free Economic Zones (FEZs): Companies operating in FEZs enjoy various tax benefits, including tax holidays on CIT, VAT exemptions, and customs duty relief on imported goods. These zones are designed to promote foreign direct investment and export-oriented industries.
  • Investment Incentives: Under the Investment Law, companies investing in priority sectors such as agriculture, renewable energy, and manufacturing can benefit from reduced CIT rates, customs duty exemptions, and other tax benefits for up to 10 years.

Other Taxes

  • Customs Duties: Uzbekistan imposes customs duties on imports, with rates varying based on the type of goods. Some goods, such as raw materials and equipment for priority industries, may benefit from reduced rates or exemptions.
  • Excise Taxes: Excise taxes are levied on alcohol, tobacco, fuel, and luxury goods. Rates vary depending on the product.
  • Property Tax: Uzbekistan imposes a tax on commercial property, with rates depending on the size and value of the property. The general rate is 2% of the property value.

Double Taxation Agreements (DTAs)

Uzbekistan has signed over 50 double taxation agreements (DTAs) with countries such as Russia, Germany, China, and the United States. These agreements reduce withholding taxes on dividends, interest, and royalties, and help prevent the double taxation of income earned in Uzbekistan and other jurisdictions.

Local Taxes

In addition to national taxes, local governments may impose minor fees and taxes, such as property taxes and business registration fees. However, most significant taxes, including CIT, PIT, and VAT, are centrally administered by the State Tax Committee.

Compliance and Reporting

Annual Filing:
Corporate tax returns must be filed by March 31st of the following year. Personal income tax returns are also due by March 31st. VAT returns are filed monthly, and businesses must remit VAT collected to the State Tax Committee.

Penalties for Late Filing:
Penalties for non-compliance or late filing include fines and interest on unpaid taxes. Interest on overdue tax payments is charged at 0.05% per day, and additional penalties may apply for underreporting or non-payment of taxes.

Recent Developments

Digital Economy and E-Commerce:
Uzbekistan is working to modernize its tax system in response to the growing digital economy. The government is exploring new tax policies targeting e-commerce, online services, and digital transactions to ensure fair taxation in this expanding sector.

Green Energy Investment:
Uzbekistan is actively promoting investment in renewable energy. The government offers tax incentives, including CIT holidays, VAT exemptions, and customs duty exemptions for companies investing in green technologies such as solar and wind power.

Expansion of Free Economic Zones (FEZs):
Uzbekistan continues to expand its network of Free Economic Zones (FEZs) to attract foreign direct investment (FDI). These zones offer substantial tax breaks and other incentives to companies involved in manufacturing, infrastructure, and export-oriented industries.

Subscribe to my free newsletter for regular updates on law, taxation and business worldwide.

Tags: