Uzbekistan, Republic of

Corporate - Deductions

Last reviewed - 06 February 2024

The tax base for CIT purposes varies significantly from the computation of taxable profits in most Western jurisdictions.

There are additional costs that cannot be deducted by PEs of foreign legal entities, such as interest on head office loans; commission fees charged by the head office; and royalty, administrative, and management expenses of the head office incurred outside Uzbekistan. However, PEs are eligible to deduct expenses incurred outside of Uzbekistan if they directly relate to their business in Uzbekistan.

Depreciation and amortisation

For tax purposes, depreciation/amortisation is calculated with application of rates defined by the Tax Code. If depreciation for accounting purposes is charged at higher rates (compared with the Tax Code rates), the difference is treated as a temporary difference for CIT purposes (i.e. deducted in future periods).

Depreciation is calculated from the date on which the asset was put into use until it is fully depreciated, disposed of, or written off. The maximum annual depreciation rates applicable to different types of fixed assets are outlined in the table below.

Depreciable item Rate (%)
Buildings and constructions 5
Constructions (e.g. bridges, oil-wells, landing strips, dams, greenhouses) 10
Pipelines, power supply lines, and communication lines 15
Machines and equipment except for transport vehicles 20
Railway, river, and air transport vehicles 10
Cars, trailers, lorries, buses, and other transport vehicles 20
Computers and other related devices 40
Depreciable assets not mentioned above 15

For statutory accounting purposes, fixed assets can be depreciated using one of the following methods:

  • Straight-line method.
  • Production method.
  • Double-declining-balance method.
  • Sum-of-the-years’ (cumulative) method.

For tax purposes, depreciation is calculated based on the straight-line method using the above marginal rates. 

Intangible assets, including leases and other property rights, are amortised over the shorter of an asset's useful life or the period of activity of the enterprise. Where an asset's useful life cannot be determined, the asset can be amortised over five years.

Expenses related to geological exploration and developmental works necessary for the extraction of natural resources are deductible for CIT purposes through depreciation at the rate of 15% per annum.

The taxpayer has the right to apply investment deductions for depreciable assets subject to depreciation for up to (i) 20% from the cost of a new technological equipment and (ii) 10% for the expansion of production in the form of a new construction.


For tax purposes, expenses incurred for acquisition of goodwill should be deductible through monthly amortisation charges at norms calculated by the taxpayers based on historical cost of goodwill and its useful life.

Start-up expenses

Current legislation does not provide specific guidance on tax treatment of start-up expenses. However, as per Uzbek accounting legislation, certain types of start-up expenses (e.g. expenses for acquisition of right for production, right for rendering services and carrying out works, right to use economic or other privileges) can be considered as expenses for procurement of intangible assets and, respectively, can be deducted through monthly depreciation charges.

Interest on short-term loans

Interest is deductible, except for interest on overdue/delayed loans (i.e. ‘penalty interest’) and interest capitalised, in accordance with Uzbek accounting legislation, in the value of fixed assets (i.e. in cases where a loan was obtained to purchase fixed assets).

Bad debt

Bad debts related to the receipt of taxable income in the previous reporting periods are deductible for tax purposes in cases where they are written off and recognised in accordance with Uzbek accounting legislation. Otherwise, such expenses should be considered as non-deductible. According to the current Uzbek legislation, arrears are recognised as bad debts upon expiration of three-years from their due date.

Charitable contributions

Charitable contributions are generally treated as non-deductible expenses and added-back to the taxable base.

Fines and penalties

Fines and penalties are considered as non-deductible expenses.


Generally, taxes are deductible for CIT purposes.

Other tax losses

Production wastes and defects within statutory norms, and losses resulting in force-majeure circumstances, are generally deductible.

Losses from the disposal of fixed assets also may be deducted if the fixed asset has been used for three or more years.

Net operating losses

Tax losses can be carried forward indefinitely, thus reducing the taxable profit of the respective year. Loss carrybacks are not permitted.

Payments to foreign affiliates

There are no special tax provisions regarding deductibility of payments to foreign affiliates for services provided. They may be deducted in full if the general deductibility criteria are met (see Transfer pricing in the Group taxation section). However, there are some limitations on deductibility of the expenses of a PE of non-residents paid to a head company (e.g. royalties, remuneration on loans, expenses not related to the PE, management and general administrative expenses not related to the PE).