Uzbekistan, Republic of
Resident corporations pay CIT on their worldwide income, whereas non-residents (i.e. foreign legal entities that have a 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 withholding tax (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 in the Tax Code (previously, annually by presidential decree). Enterprises (i.e. legal entities) are generally subject to CIT at the rate of 15%. Commercial banks, producers of cement (clinker) and polyethylene granules, mobile services providers, and markets/shopping malls are subject to CIT at the rate of 20%.
Among the amendments introduced to the Tax Code on 1 January 2023 is the abolishment of the requirement to have at least 15% of the aggregate revenue generated from export of goods and services for applying 0% CIT on profits from export of goods/services.
It is worth noting that, as of 1 January 2023, 0% CIT will not be applied to export profits received from the provision of services to non-residents of Uzbekistan operating in Uzbekistan via PE.
The rate of CIT applicable to the following categories of the taxpayers may be reduced by 50%:
- Payers of turnover tax switching to CIT for the first time after 1 September 2022, for the tax period in which they switched to CIT, provided that their turnover does not exceed UZS 10 billion during that tax period.
- CIT payers whose revenue generated throughout any tax period after 1 September 2022 exceeds UZS 10 billion for the first time, for the tax period in which this threshold is exceeded and for the tax period following it, provided that the revenue generated throughout the tax period in which the reduced rate is applied does not exceed UZS 100 billion.
See the Withholding taxes section for WHT rates applicable in Uzbekistan.
Simplified tax regime (i.e. turnover tax)
An optional simplified tax regime is available for all legal entities with annual turnover less than UZS 1 billion and individual entrepreneurs with turnover ranging from UZS 100 million to UZS 1 billion. Under this regime, turnover tax replaces CIT and VAT.
Turnover taxpayers whose revenue exceeds UZS 1 during the year will, however, become subject to the general income tax regime from the month following the month in which the annual revenue threshold was exceeded.
The reporting period for turnover tax has been set to a month (instead of a quarter previously).
Legal entities that provide intermediary services under a commission agreement, instructions, and other intermediary services agreements, including individual entrepreneurs providing intermediary services to telecom operators, calculate revenue from sale of goods/services on the basis of the transaction amount.
Certain taxpayers are not eligible for application of turnover tax (e.g. importers, producers of excise-liable goods, legal entities engaged into subsurface extraction, sale of petrol, diesel/gas fuel).
The general turnover tax rate is 4% but may vary from 1 to 25% depending on type of entity and services provided.
Starting from 1 January 2022 till 1 January 2025, 1% turnover tax is applicable to legal entities located in established touristic zones.