Uzbekistan, Republic of

The following notable changes were introduced to Uzbek legislation:

• Abolition of Export Privileges from January 1, 2025: 0% CIT rate for the export of goods (services) is abolished, income from exports will be included in the tax base for turnover tax
• Starting from January 1, 2025, a 1% turnover tax is available for wholesale and retail pharmacy organisations, and taxpayers in the retail trade sector located in remote and mountainous areas. 3% turnover tax will be applied to taxpayers engaged in electronic commerce of goods (works, services).
• For cigarettes, starting from January 1, 2025, the ad valorem rate of 10% of the cost is excluded from the excise tax rate calculation and from July 1, 2025 the rates for imported and local cigarettes will be equalised. 
• From February 1, 2025 to January 1, 2030, foreign companies that are not tax residents of countries with which Uzbekistan has a double taxation agreement are exempt from CIT if their annual volume of export IT services to residents of the IT park (including services for which royalties are paid) exceeds 10 million dollars.
• Since 1 January 1, 2025, in accordance with the WTO agreement on subsidies and countervailing measures, income tax and turnover tax benefits for exporters and re-exporters of goods and services have been abolished.
• The excise tax on mobile communication services has been abolished.
• Starting from April 1, 2025, the excise tax will be extended to all soft drinks with sugar content. An excise tax of 500 UZS per 1 liter is imposed on non-carbonated beverages (fruit drinks, lemonades, kvass and others), with the exception of juices made from fruits and (or) vegetables that are naturally sweet and do not contain additional sugar and other sweetening or aromatic substances.
• Carbonated drinks containing sugar or other sweetening or flavouring substances and packaged in consumer packaging (except for energy and toniс drinks) are subject to excise tax at 500 Uzbekistani soum (UZS) per litre, energy and tonic drinks at UZS 2,000 per litre.
• Since January 1, 2025 tax rates for the use of water resources have been increased by 10% for water users, including power plants, utilities, producers of soft drinks and alcoholic beverages, except beer and wine, and industrial enterprises. In accordance with the presidential decree (PP-107) dated April 1, 2023, water tax rates for other sectors will be gradually unified with industrial tariffs.
• As of January 1, 2025, tax benefits available to textile and knitwear enterprise exporters (earning at least 80% of revenue from foreign supplies) were not extended and considered abolished.
  
• From January 1, 2025 to January 1, 2028, companies that hire low-income employees with salaries above 1.5 minimum wage will pay a social tax rate of 1%.
• From September 1, 2024 to September 1, 2027, the social tax for companies that employ students from schools, colleges and technical schools under the age of 30 for vocational training is paid a 1% social tax on income paid to them in the form of wages.
• Companies that hire foreign teachers are exempt from social tax until January 1, 2030.
• The statute of limitations period for tax obligations is reduced from five years to three years.
• From 1 January 2023, the value-added tax (VAT) rate is reduced from 15% to 12%.
• Desktop tax audits for validation of VAT refund claims are reduced from 60 days to 30 days.
• A new procedure is introduced allowing taxpayers to recover input VAT related to goods/services purchased in the period when VAT certificate was suspended (previously, such VAT was non-recoverable).
• ‘Large taxpayers’ are eligible to utilise their recoverable VAT amount towards import VAT payable at importation of goods.
• As of 1 April 2023, the VAT incentive for geological services provided within the framework of annual state programs for development and reproduction of mineral resource base at the expense of the state budget was abolished.
• From 16 November 2023 till 1 January 2028, sales turnover, as well as the import of goods (services) purchased within the framework of projects financed through loans from International Financial Institutions and foreign governmental financial organisations (except for those refinanced through banks of Uzbekistan), attracted by state organisations and entities with a state share of 50% and above are exempt from VAT.
• Income of energy producers from sale of ‘green energy’ certificates is exempt from corporate income tax (CIT) according to amendments introduced to the Tax Code under the Law of Uzbekistan #906 dated 7 February 2024.
• The Tax Code explicitly stipulates the applicability of dividend-related clauses of double tax treaties (DTTs) to the permanent establishment’s (PE’s) net profit tax charged on PE’s after-tax profits.
• Application of increased rates of property tax in respect of abandoned buildings and unutilised manufacturing facilities has been abolished.
• The VAT incentive for turnover on implementation of research and innovation works carried out at the expense of the state budget was cancelled.
• The deadline for filing of annual personal income tax (PIT) and Social Tax (ST) returns is amended to 15 February (previously, 25 March).

• Payers of turnover tax who switched to payment of CIT for the first time after 1 September 2022 are eligible to apply 50% reduced CIT rate during the following tax year, provided that their turnover does not exceed UZS 10 billion during that tax year.
• CIT payers whose turnover after 1 September 2022 exceeded UZS 10 billion for the current tax year for the first time are eligible for 50% reduced CIT rate during the current tax year and following year, provided that during these tax periods their turnover does not exceed UZS 100 billion.
• Deadline for submission of a notification on advance payment is set as the 15th day (previously 10th day) of the first month following the previous quarter.
• New deadlines for tax reporting and payments of property tax are introduced.
• Tax rate of subsurface use tax for mining of iron has been reduced from 5% to 2%.
• A unified tax rate of 4% has been introduced for all categories of turnover taxpayers.
• Rent tax will not apply to rent income connected with extraction of natural resources on subsoil fields where the extraction started between 1 January 2024 and 31 December 2025. This exemption will apply for the entire period of extraction works.
• Payers of turnover tax may choose to pay fixed tax in lieu of turnover tax based on  their annual turnover.
• Deadline for filing tax reports and certificate of land tax on available non-agricultural land plots are set not later than 20 January of the current reporting year (previously 10 January).
• Deadline for tax payment (only for turnover taxpayers) is also set not later than the 20th day (previously, 10th day) of the third month of each quarter.
• Starting 1 April 2023, customs duty incentives on property imported by entities with foreign investments for use in their own production were abolished, unless otherwise provided by investment agreements signed before 1 January 2023.
• A number of goods (per government approved list) imported for construction, renovation, and equipping of hotels, business centres, and retail stores should be exempt from customs duties between 1 March 2024 and 1 March 2026 (e.g. special equipment, appliances, raw materials, components, furniture, construction materials).
• VAT and CIT payers with annual turnover of up to UZS 10 billion are now eligible to settle their tax liability in instalments during six months via notification mechanism (previously instalments option was available only upon clearance of respective application by the tax authorities).