During the years of independence, a favorable business environment has been formed in the republic, a wide system of legal guarantees and privileges for foreign investors has been introduced.
Fundamental Laws, Decrees, Resolutions of the President and the Government, aimed at providing benefits and preferences to foreign investors, as well as stimulating activities of enterprises with participation of foreign capital have been adopted.
Such documents include laws of the Republic of «On investments and investment activities», «On special economic zones» that shall enter into force on May 17 and others.
Taxable income of legal entities is reduced by the amount of: funds allocated for modernization, technical and technological re-equipment of production, purchase of new technological equipment, expansion of production in the form of new construction, reconstruction of buildings and structures used for production needs, as well as repayment of loans received for these purposes, reimbursement of the value of the leased object, less depreciation accrued in the relevant tax period, but not more than 30 percent of taxable profit. The taxable profit is reduced for five years, starting from the tax period in which the above-mentioned expenses are made, and for technological equipment – from the moment of its commissioning. In case of sale or gratuitous transfer of new technological equipment within three years from the moment of its acquisition (import), the effect of the specified benefit is canceled with renewal of obligations to pay corporate income tax for the entire period of application of the benefit. This privilege is applied by taxpayers engaged in the production of goods (work, services);
Exempted from value added tax (Articles 208-209, 211 of the Tax Code of the Republic of Uzbekistan): When calculating the tax on the property of legal entities, the taxable base is reduced by the average annual residual value (average annual value) of machines and equipment that have been in operation for no more than ten years. newly created enterprises – within two years from the date of state registration. This exemption does not apply to enterprises established on the basis of reorganized legal entities, as well as legal entities operating in the territory of other enterprises using equipment leased from these enterprises. The following are exempt from customs duties (Article 33 of the Law of the Republic of Uzbekistan “On customs tariff”): Enterprises attracting foreign direct investment and specializing in manufacturing products in the sectors of the economy listed below are exempted from legal income tax, property tax, improvement tax and development of social infrastructure, single tax payment for micro firms and small enterprises, as well as mandatory deductions to the Republican Road Fund (Decree of the President of the Republic of Uzbekistan No. DP-3594 of 11.04.2005): 3.Silk industry: 4.Building materials industry: 5.Industrial production of poultry meat and eggs. 6.Food industry: 7.Meat and dairy industry: 8.Processing and canning fish and fish products 9.Chemical industry. 10.Petrochemical industry 11.Medical industry, as well as production of medicines for veterinary medicine 12.Production of packaging materials 13.Construction of power plants on the base of alternative energy sources. 14.Coal industry: 15.Production of electro ferroalloys and hardware for production purposes. 16.Mechanical engineering and metalworking: 17.Machine tool and instrumental industry. 18.Glass industry, porcelain industry and faience industry. 19.Microbiological industry. 20.Manufacturing toys. 21.Tourism: 22.Waste management. The specified tax benefits are provided with the volume of direct private foreign investment: The above tax benefits are subject to the following conditions: Newly created enterprises with foreign investments in which the foreign investor’s contribution in cash is at least 5 million USD, if the tax legislation changes, they are entitled to apply for 10 years from the date of their state registration the norms and provisions for the payment of corporate income tax, tax value added (turnover on the sale of goods, works, services), property tax, tax on the improvement and development of social infrastructure, unified social payment, single tax payment, as well as mandatory contributions to the Republican Road Fund and the extrabudgetary Fund for reconstruction, overhaul and equipment of secondary schools, professional colleges, academic lyceums and medical institutions that operated on the date of their state registration. Within the framework of investment projects worth over 50 million USD and a foreign investor’s share of at least 50 percent, the construction of the necessary external, outside the production site, engineering and communication networks is carried out at the expense of budget funds and other internal sources of financing (Decree of the President of the Republic of Uzbekistan No. DP-4434 of 10.04.2012). The following additional benefits and preferences are established for manufacturing enterprises with foreign investments, exporting products of own production for freely convertible currency: Foreign companies engaged in oil and gas prospecting and exploration, as well as foreign contractors and subcontractors attracted by them are exempt from payment of: From compulsory sale of proceeds in foreign currency are exempt (Resolution of the Cabinet of Ministers of the Republic of Uzbekistan No. 245 of 29.06.2000 “On measures for further development and strengthening the over-the-counter foreign exchange market”): From August 1, 2018* 25% of incoming foreign exchange earnings from exports of agricultural products and wild plants are subject to mandatory sale; ** Including transit. Also, in accordance with the Decree of the President of the Republic of Uzbekistan No. DP-4609 of 07.04.2014. extended to January 1, 2017 a moratorium on tax audits of financial and economic activities of small businesses that pay taxes and other obligatory payments in a timely manner, as well as ensure sustainable growth rates and profitability of production (with the exception of unscheduled inspections during the liquidation of legal entities, within the framework of criminal cases, as well as related to using budgetary and centralized funds and resources). In accordance with the Decree of the President of the Republic of Uzbekistan No. DP-5495 of 01.08.2018 “On measures of radically improving the investment climate in the Republic of Uzbekistan”, the following is provided: Approved by: From October 1, 2018, the following land allocation mechanisms for investment activities will be introduced:
No.
Name of goods
HS code
1.
Agricultural products and wild plants*
07, 08, 0904, 12
2.
Natural gas
2711 21 **
3.
Copper matte, cement copper (sedimentary copper)
7401
4.
Copper rods and profiles
7407
5.
Copper wire
7408
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