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Forvis Mazars in Uzbekistan
8A Afrosiab street, office 501, 5th
floor “Dmaar Plaza” Business Center,
Tashkent – Uzbekistan
+998 93 373 11 40
 
infoca@mazars.kz
https://www.forvismazars.com/uz
Ludmila Dyakonova
Partner
+7 727 355 40 00
ludmila.dyakonova@mazars.kz

Uzbekistan

Corporate taxes and other direct taxes

In general, the concept is similar to the CIT approach used in developed countries worldwide. Taxable income is calculated as annual income minus expenses. It is only possible to deduct properly documented expenses provided that the expenses are connected with the taxable income. Dividends and capital gains are excluded from taxable income. The percentage of depreciation norms for fixed assets is set out in the Tax Code and is substantively similar to IFRS principles. Losses can be carried forward without limitation. The rules on the carrying forward of losses do not apply to losses generated during periods when a company has enjoyed tax benefits. There are thin capitalization rules. A CFC rule exists.

WHT applies to incomes paid to non-residents that are not registered for tax purposes in Uzbekistan. Taxable incomes are listed in the Tax Code. Uzbekistan has signed 54 treaties on avoidance of double taxation. Although the treaty rates prevail over the Tax Code, non-residents must have a duly issued tax residency certificate to be able to apply the treaty. The multilateral instrument (MLI) is not in force.

Small and medium businesses may enjoy a special tax regime according to which the Unified Tax on income is paid. This tax replaces CIT.

Transfer pricing in Uzbekistan
Arm's length principle Since 2020
Documentation liability Since 2022
APA Since 2022
Country-by-Country liability
 
Master file-local file (OECD BEPS 13) applicable  
Penalty    
- lack of documentation Less than 500 EUR
- tax shortage 40% of tax shortage
Related parties   Legal entities are considered to be related:
- legal entities are related if one legal entity holds a direct or indirect participation in another legal entity and the share of such participation in the charter capital exceeds 20%
- an individual and a legal entity are related if the individual holds a direct or indirect participation in the legal entity and the share of such participation in subscribed capital exceeds 20%.
Safe harbors -

Level of attention paid by Tax Authority:

2023 is the first year TP reporting has to be submitted to the state authorities. The tax authorities may start audits on TP matters only after June 2023.

VAT and other indirect taxes

The VAT concept is quite similar to the concept applied in developed countries worldwide. The turnover subject to VAT is in general the total value of sales (Output VAT). The VAT paid to suppliers (input VAT) is deducted from Output VAT. Input VAT cannot be offset if the goods, works, or services purchased are not related to taxable turnover, the VAT-invoice is not issued by a supplier or issued with the violation of the legal requirements, the supplier is declared by a court to be inactive entity, etc. The VAT rate for the export of goods is 0% and there is a certain procedure for the refund of the related input VAT.

Excise Tax is paid by importers or sellers of:
1) Alcoholic products
2) Tobacco products
3) Oil & gas products
4) Motor vehicles.

VAT options in Uzbekistan Applicable / limits
Distance selling
Call-off stock
VAT group registration
Cash accounting - yearly amount in EUR (approx.)*
Import VAT deferment
Local reverse charge
Option for taxation
- letting of real estate
- supply of used real estate
VAT registration threshold*

1 bUZS (approx. EUR 77k)

Personal income tax / Social security system

Tax residents shall be recognized as an individual staying in the Republic of Uzbekistan if they do so for at least 183 calendar days in any consecutive 12-month period ending in the current tax period (calendar year). The concept is the same as worldwide.

The 12% Social Tax contains all types of contributions to the social system, including the pension scheme and access to the state medical system.

Wage related taxes
in Uzbekistan
Minimum wage Average wage in private sector
Exchange rate UZS/EUR in EUR in UZS in EUR in UZS
13536 78 1,050,000 400 5,414,400
Total wage cost 87 112% 448 112%
Employer's social security and other contributions 9 12% 48 12%
Gross salary 78 100% 400 100%
Personal income tax 9 12% 48 12%
Employees' contributions - 0% - 0%
Net salary 68 88% 352 88%