Tax incentives, Corporate Taxation and Foreign Workers Taxation.

In general, businesses operating in Uzbekistan pay taxes either under the standard tax regime or special tax regime.

Standard tax regime envisages payment of range of taxes, including the following:

Corporate income tax (CIT), including withholding tax;
Value added tax (VAT), including VAT on imported goods/ services;
Personal income tax (PIT);
Social tax (ST);
Property tax;
Land tax;
Water use tax;
Excise tax;
Subsurface use tax.

Relevant legislation may also establish certain duties and payments.
For details, refer to Table.

No.	Tax	Taxpayers	Taxable Base	Rate
1.	Corporate income tax	Legal entities having taxable income, non-residents acting in Uzbekistan via a permanent establishment (PE)	Taxable profit calculated as a difference between gross revenue and deductible expenses. The taxable base can be reduced by an amount of losses, accumulated in previous periods	General rate – 15%; other rates may apply depending on type of activity, e.g. 20% for cement / polyethylene granules production, mobile communication services, banks, markets and shopping malls
1.	Withholding tax	Foreign legal entities and individuals receiving income from Uzbekistan	Uzbek-sourced income paid to non-resident*	dividend, interest – 10%; insurance premiums – 10%; telecom, transportation – 6%; other (royalty, rent, etc.) – 20%.
2.	Value added tax	Uzbek legal entities, non-residents acting in Uzbekistan via PE	Turnover from sales of goods and services, import of goods and services	General rate – 15%; 0% rate applies to certain supplies
3.	Personal income tax	Personal income tax (withheld by employers from total income)	Individuals earning taxable income – employer shall be a withholding agent	12% – for tax residents; 20% – for tax nonresidents; 6% – for highly skilled foreign labor force**
4.	Social tax	Employers, recipients of seconded personnel	Employment income paid to employees. Secondment fees paid to secondment provider	General rate – 12%; rate may vary for certain organisations, e.g. 25% – budget organisations
5.	Property tax	Legal entities of the Uzbekistan having taxable property on the territory of Uzbekistan	Average annual net book value of immovable property, overdue construction-in-progress	2%; double rate may apply in certain cases
5.	Property tax	Non-residents having immovable property on the territory of Uzbekistan.		2%; double rate may apply in certain cases
6.	Land tax	Legal entities / individuals owning, using or renting land plots	Total area of a land plot	Rates vary depending on the location of land and the type of land
7.	Water use tax	Legal entities – residents of Uzbekistan, non-residents acting in Uzbekistan via PE	Volume of water used	Rates vary depending on type of activity and type of water source
8.	Excise tax	Legal entities producing, selling or importing excisable goods	Tax base depends on type of goods/services, e.g. volume of excisable goods in kind / value of excisable goods sold	Rates vary depending on type of goods/services
9.	Subsurface use tax	Legal entities/individuals engaged in search, exploration of minerals and artificial (man-made) mineral formations as well as processing of those minerals in Uzbekistan	Volume of minerals extracted	Rates vary depending on type of the mineral

*An individual permanently residing in the Republic of Uzbekistan or staying in Uzbekistan for 183 days or more, for any period up to twelve months beginning or ending in the financial year, is considered as a resident of the Republic of Uzbekistan. Individuals who are not residents of the Republic of Uzbekistan are taxed on income derived from sources in Uzbekistan as mentioned in the first paragraph of this table.

**The highly skilled foreign labor force is defined by the Resolution of President No. 4008 dated dated November 7, 2018 (https://lex.uz/ru/docs/4045563), as graduates of top 1000 universities based on the rating of internationally recognized organizations, with an experience of at least 5 years and annual remuneration for work in Uzbekistan of at least USD 60,000.

Tax Incentives and Preferences

According to Section 21 of the Tax Code, tax benefits in the form of exemption from land tax, property tax and water use tax are provided to legal entities created with the attraction of foreign direct investment and specializing in the production of goods (services) in the sectors of the economy in the list approved by legislation.

Tax exemptions are granted to entities attracting foreign direct investments for a certain period which varies depending on investment amount, when investing:

from USD 300,000 to 3 million USD - for a period of 3 years;

more than 3 million USD up to 10 million USD - for the period of 5 years;

over 10 million USD - for the period of 7 years.

The above tax incentives are granted if the following, without limitation, conditions are met:

the enterprises shall be specialized in production of goods or provision of services/ works in certain industries as per the approved list (https://www.lex.uz/acts/561818);

the enterprises are located in any city or rural area settlement of Uzbekistan except for Tashkent region and Tashkent city (exception is provided to companies providing travel services and waste management services);

the Republic of Uzbekistan does not provide sovereign guarantees for such foreign investment;

the share of foreign participants in the authorized fund (authorized capital) of legal entities is not less than 33 percent, and for joint stock companies - not less than 15 percent;

the investment should be made in hard currency or new/modern technological equipment, and at least 50% of the respective tax savings should be reinvested for further development of enterprises.

An enterprise with the participation of foreign direct investment has the right to enjoy other tax incentives provided for by tax legislation.

The new Tax Code envisages that tax incentives can be generally provided by the Tax Code only. However, benefits for certain taxes, except VAT, excise tax, and tax for subsoil use, can be provided by the President of Uzbekistan only in the form of reduction of the established tax rate but not more than for 50% and for the period not more than three years. The new Tax Code also makes it clear that tax incentives cannot be individualized (previously, individual tax incentives used to be provided to major investment projects).

Article 75 of the Tax Code establishes that the tax incentives on certain tax, with the exception of VAT, excise tax on goods produced and sold, and subsurface usage tax can be provided by the decisions of the President of Uzbekistan only in form of rate reduction (up to 50%) for a period not exceeding 3 years.

Additional tax incentives may be provided under an Investment Agreement concluded by a foreign investor with the Government of the Republic of Uzbekistan under the Law of Uzbekistan on Investments and Investment Activity.

Moreover, as noted above, special tax regime envisaging provision of certain tax incentives are available for participants of special economic zones, entities attracting foreign direct investments, etc.

Trade Incentives

Over recent years, a number of structural reforms have been implemented in the sphere of foreign trade aimed at strengthening the export potential, improvement of customs administration as well as creation of an effective system of incentives for businesses to engage in foreign trade activities.

Thus, in order to stimulate exports of domestic products as well as in accordance with the Resolution of the President of the Republic of Uzbekistan dated May 24, 2019, subsidies and compensations are provided to exporting enterprises to cover interest expenses on pre-export credits of commercial banks and transportation by railroad transport when exporting certain products.

Also, in accordance with the above-mentioned Resolution, legal entities that have a share of exports of finished products in the total revenue from the sale of goods (works, services) of more than 50 percent at the end of the reporting period, including through the commissioner (agent), at the request, may be deferred for the payment of value added tax for up to 120 days from the date of acceptance of the customs declaration for the import of raw materials, components and materials used in the manufacture of exported products.

The Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated December 31, 2020 PKM-826 (https://lex.uz/docs/5201216) approved the procedure of financial assistance of the Export Promotion Agency under the Ministry of Investment and Foreign Trade to the exporter organizations for compensation of costs associated with the introduction of international standardization and certification systems both in the country and abroad, registration of national products in foreign authorized bodies, creation of exhibition stands and participation in international exhibitions and fairs, presentations and promotional campaigns, including the promotion of traditional as well as participation in international tenders and competitions.

Furthermore, an accelerated seven days VAT refund process is introduced for exporters.

Other incentives are available below:

No.	Object of Incentives, Eligibility Criteria	Type of Incentives	Period of Validity of Incentives
1.	Construction materials not produced in Uzbekistan and imported by SEZ participants for implementation of projects as per the investment agreement	Exemption from the customs payments (except for VAT and customs processing fee)	For the period of construction
2.	Technological equipment not produced in Uzbekistan (as per approved list), and imported by the participants of SEZ* (https://lex.uz/docs/2144911)	Exemption from the customs payments (except for customs processing fee)	Unlimited
3.	Raw materials, materials and components imported by SEZ participants used for production of goods intended for export.	Exemption from the customs payments (except for customs processing fee)	Unlimited
4.	Goods imported by the participant of FEZ	deferred payment of VAT	120 days
5.	Range of raw materials, not produced in Uzbekistan and used in the production of the medical drugs and other medical supplies, and their packaging, used for maintenance laboratory animals, pre-clinical studies, imported by pharmaceutical companies, scientific and research institutions, and entities, engaged in the retail of pharmaceutical production	Exemption from the customs payments (except for processing fees)	till January 1, 2022
6.	Range of technological laboratory equipment, spare and completing parts for that equipment, sandwich panels and ventilation systems, not produced in Uzbekistan	Exemption from the customs payments (except for processing fees)	till January 1, 2022
7.	Transport vehicles, used for international shipments and passenger transportation, and items needed for their maintenance and regular exploitation during expedition (fuel, equipment etc.)	Customs duty	Unlimited
8.	National and foreign currency (except for currency used for numismatic purposes)	Customs duty, VAT	Unlimited
9.	Goods transported under customs control in the customs regime of transit through the customs territory and intended for use in the third countries	Customs duty	Unlimited
10.	Items of material and technical supplies and equipment, food and other property, export outside the customs territory to ensure the activities of the vessels of the Republic of Uzbekistan and vessels leased (chartered) by legal entities and individuals of Uzbekistan, engaged in sea fishing as well as their products imported to the customs territory	Customs duty	Unlimited
11.	Goods to be converted into state revenue	Customs duty	Unlimited
12.	Goods imported as humanitarian aid, in the manner determined by the Cabinet of Ministers of the Republic of Uzbekistan	Customs duty, VAT	Unlimited
13.	Goods imported for charitable purposes, including the provision of technical assistance, through states, governments, international organizations	Customs duty, VAT	Unlimited
14.	Goods imported by legal entities at the expense of loans (credits) provided by international and foreign government financial organizations in accordance with international treaties of the Republic of Uzbekistan as well as imported at the expense of grants	Customs duty, VAT	Unlimited
15.	Property imported for the personal needs of foreign investors, foreign citizens and stateless persons permanently residing outside of the Republic of Uzbekistan and staying in Uzbekistan in accordance with labor contracts concluded with foreign investors	Customs duty	Unlimited
16.	Goods imported by foreign legal entities that made direct investments to Uzbekistan economy for a total amount equivalent to more than fifty million US dollars, provided that the imported goods are produced by the foreign legal entity	Customs duty
17.	Technological equipment imported to Uzbekistan, as per the list approved list as well as components and spare parts, provided that their supply is envisaged by the terms of the contract (agreement) for the supply of technological equipment*	Customs duty, VAT
18.	Technical means of systems of operational-search measures purchased by telecommunications operators and a special body for certification of technical means of systems of operational-search measures, in the presence of a written confirmation of the authorized state body	VAT	Unlimited
19.	Medicines, veterinary medicines, medical and veterinary products as well as raw materials imported according to the list determined by legislation for the production of medicines, veterinary medicines, medical and veterinary products, and not produced in Uzbekistan	VAT	Unlimited
20.	Goods transported across the customs border in the form of humanitarian aid, gratuitous aid or for charitable purposes, including the provision of technical assistance	Customs processing fees	Unlimited
21.	Goods transported across the customs border by individuals for non-commercial purposes within the limits of duty-free importation established by law
22.	Goods placed under customs regimes of temporary storage and refusal in favor of the state
23.	Goods imported into the customs territory for the official use of diplomatic missions and consular offices of foreign states, international associations and organizations enjoying customs privileges as well as goods exported from the customs territory and intended to ensure the functioning of diplomatic and equivalent representations of the Republic of Uzbekistan
24.	Cultural valuable items temporarily exported from the customs territory and imported back to this territory which are in permanent storage in the funds of state museums, information and library institutions, archives and other state repositories of cultural values of the Republic of Uzbekistan
25.	Goods imported by legal entities, the cost of which is ten times the size of Base Calculation Unit value or less
26.	Legal entities whose main activity is the organization of theme park services	Exemption from the customs payments (except for processing fees)	till January 1, 2022
27.	Business entities on import of vehicles, from the date of production of which no more than 5 years have passed, used for the carriage of passengers and having eight and more than eight seats, apart from the driver’s seat	Exemption from the customs payments (except for VAT and processing fees)
28.	Business entities on import of equipment, mechanisms and spare parts for the construction, reconstruction and equipping of cable cars, ski lifts, funiculars and other similar objects and structures as well as balloons (balloons), motor boats and ATVs according to the lists approved in the prescribed manner.	Exemption from the customs payments (except for VAT and processing fees)
29.	Importation of equipment imported for re-equipment of research institutions and organizations within the framework of the ongoing modernization according to lists approved in the prescribed manner	Exemption from the customs payments (except for VAT and processing fees)	unlimited
30.	Organizations-members of the organizational structure of the State Roads Committee of the Republic of Uzbekistan on import of equipment, raw materials and materials, spare parts and components and assemblies imported for the construction, reconstruction, repair and operation of highways according to the lists approved in accordance with the established procedure	Exemption from the customs payments (except for VAT and processing fees)	till January 1, 2025
31.	National road transport companies, the share of export of international transport services in the annual revenue of which is 50 percent or more, as well as transport and logistics companies involved in the organization of transport, warehousing, storage, processing and distribution of goods, on import of warehouse equipment, handling equipment, units, spare parts and other goods not manufactured in the Republic of Uzbekistan, intended for the provision of transport and logistics services, according to lists approved in the prescribed manner	Exemption from the customs payments (except for VAT and processing fees)	Till January 1, 2022
32.	Organizations engaged in the procurement, storage and processing of leather, fur and fur raw materials and wool, automated slaughter of cattle, production of wool, astrakhan fur and artificial leather, leather goods, footwear on import of equipment, components, not produced in the Republic of Uzbekistan, raw materials, materials and accessories according to the lists approved in accordance with the established procedure	Exemption from the customs payments (except for VAT and processing fees) and deferred payment of the customs payments (except for processing fees)	till January 1, 2022
33.	Fish farming clusters with an annual production capacity of at least 50 tons of fish on import of breeding fish stocks, breeding fish roe as well as equipment, inventory, mechanisms and their spare parts not produced in the republic, necessary for incubation, laboratories, intensive fish farming, catching fish, processing fish products, cooling and storing fish, equipment for providing alternative energy, specialized equipment for land reclamation and vehicles for transporting live fish and compound feed and mineral fertilizers (ammophos) imported from abroad by foreign organizations and their subsidiaries, company stores, dealer network and business entities for the needs of fish farms	Exemption from the customs payments (except for VAT and processing fees)	till November 1, 2021
34.	Non-governmental educational institutions according to lists formed in accordance with the established procedure on import of modern educational and laboratory equipment, computer equipment, software products, educational and scientific-methodical literature, inventory and material-resources not produced in the Republic of Uzbekistan, required for the operation of those institutions	Exemption from the customs payments (except for VAT and processing fees)	till January 1, 2025

*For the list of the technological equipment exempt from customs duty and VAT at importation to the territory of Uzbekistan, refer to the https://lex.uz/docs/2144911

Версия для слабовидящих

Benefits and preferences for foreign investors

Contacts