Resident corporations pay corporate income tax (CIT) on their worldwide income, whereas non-residents (i.e. foreign legal entities that have a permanent establishment [PE] in Uzbekistan or have income from sources in Uzbekistan not associated with a PE) pay CIT on income resulting from activities/sources in Uzbekistan.
Non-resident corporations are taxed directly at the level of their Uzbek PE, if there is one, or via WHT at the source of payment of the Uzbek-source income.
CIT is charged on taxable profit calculated as a difference between gross income and deductible expenses reduced by applicable incentives granted by the Tax Code, other laws, or presidential decrees.
The CIT rate is set annually by presidential decree. In 2017, enterprises (i.e. legal entities) are generally subject to CIT at the rate of 7.5%. Commercial banks are subject to CIT at the rate of 15%.
Companies providing mobile services are taxable on excess profits through differentiated CIT rates as follows:
- If profitability is lower than 20%, the CIT rate is 7.5%.
- If profitability is higher than 20%, 50% of the CIT rate is charged on profits exceeding the 20% level of profitability.
See the Withholding taxes section for WHT rates applicable in Uzbekistan.
Simplified tax regime
An optional simplified tax regime is available for micro-firms and small businesses, which prescribes payment of one of the following taxes: unified tax payment (UTP), unified land tax (ULT), or fixed tax for certain types of entrepreneurs. For these taxpayers, the UTP, ULT, or fixed tax replaces the CIT, value-added tax (VAT), water-use tax, IDT (see Local income taxes below), property tax, and other local taxes and duties.
Excise and customs duties remain applicable for this group of taxpayers (unless a specific exemption applies). However, micro-firms and small businesses producing excise-liable goods or engaged in subsurface extraction may not opt for the UTP regime.
UTP is obligatory for companies engaged in catering, retail, and wholesale, irrespective of headcount.
The general UTP rate is 5%.
ULT is payable by agriculture companies, and the rate is 0.95% of normative value of agricultural land.
Local income taxes
There is a local tax on accounting profit (less CIT), an infrastructure development tax (IDT), which is charged at a maximum rate of 8%.
IDT is reported jointly with CIT on a quarterly basis.