Uzbekistan, Republic of

Individual - Income determination

Last reviewed - 31 October 2019

Employment income

Taxable income of an individual includes the following items:

  • Income from employment, including:
    • All payments accrued and paid to individuals under employment or civil contracts.
    • Motivation payments (e.g. annual bonuses, professionalism and tutorship allowances, long-service premiums).
    • Compensation payments (e.g. hardship and overtime allowances, per diems exceeding statutory norms).
    • Payments for time off (e.g. various vacation pay, attendance of qualification courses).
  • Income in the form of material benefits, including, without limitation:
    • Payments for goods/services made by employers in favour of their employees (e.g. utilities, food allowance).
    • Gifts, goods (works or services) donated.
    • Discounts to employees for goods (works or services) produced.

Equity compensation

There are currently no special rules for the taxation of stock option plans. Tax treatment is based on the general provisions of the tax law, which do not prescribe taxation of the income unless an employee exercises one's option and purchases stock at the below-market cost.

Business income

Individuals receiving income from entrepreneurial or similar activities are supposed to be properly registered as individual entrepreneurs. Individual entrepreneurs are subject to fixed tax that varies depending on the activity and location. If applicable, individual entrepreneurs are subject to payment of other taxes, including:

  • Customs duties.
  • Taxes and special payments for subsoil users.
  • Water tax.
  • Excise tax.
  • Unified social payment (USP).
  • State duty.
  • Contributions to Road Fund for the acquisition and (or) the temporary importation of vehicles.

Capital gains

Capital gains of residents are taxed at the generally applicable PIT rate. Capital gain from sale of immovable property is taxed at 12%. Taxable basis shall comprise the difference between the sales price and the acquisition price (in case the acquisition price cannot be determined, taxable base should comprise sales price of the asset, while for immovable property taxable base shall be the difference between sales price and inventory value of the property).

Capital gains of non-residents from sale of property located in Uzbekistan are taxed at the 20% rate. In case of absence of the documents supporting the acquisition prices of such property, PIT will be assessed on the sales price.

Dividend income

Taxable income of an individual includes dividend income. Dividends reinvested in the same entity (i.e. the payer of dividends) are exempt from PIT.

Dividends received by residents are taxed at the 5% rate and non-residents at the 10% rate.

Interest income

Taxable income of an individual includes interest income. However, interest income received from bank deposits is exempt from PIT.

Interest income received by residents is taxed at the 5% rate and non-residents at the 10% rate.

Rental income

Taxable income of an individual includes rental income. Income of residents from rent of property is taxed at the 12% PIT rate, on the contract price. However, the rental fee shall not be less than the fixed rate established for 1 square metre.

Rental income received by non-residents should be taxed at source of payment at the 20% rate.

Royalty income

Royalty income is defined as payments for:

  • the use of or right to use an object of science, literature, and art work, and 
  • the use of patent, trademark, design or model, plan, secret formula or process, or for information (know-how) concerning industrial, commercial, or scientific experience.

Royalty income of residents is taxed at the generally applicable PIT rate of 12%. Royalty income of non-residents should be taxed at the 20% rate.

Other income

Taxable income of an individual also includes, without limitation, prizes and lottery winnings.

Exempt income

The following is a representative list of items exempt from personal taxation:

  • State pensions.
  • Payment by an employer for medical treatment (however, medical insurance paid by an employer is taxable).
  • Compensation for work-related injuries.
  • Business trip allowance within the established norms.
  • Insurance coverage received.
  • Money and property inherited.
  • Bank interest from deposits with banks.
  • Dividends reinvested in the same entity (i.e. payer of dividends).
  • Part of salary (or other taxable income) that is paid for an employee’s self-education or education of an employee's children under 26 in Uzbek higher education institutions.
  • Long-term life insurance premiums if these are paid to legal entities that have an Uzbek insurance licence.
  • Income received gratuitously from close relatives in the form of shares and stock.