Uzbekistan individual income tax rates are progressive from 11% to 22%.
Taxable income (UZS) Tax Rate
Up to 6x Minimum Wage 11%
Between 6x-10x Minimum Wage 17%
10x Minimum Wage and more 22%
Resident individuals are taxable on worldwide income; nonresidents are taxed only on income received in Uzbekistan.
Residence - An individual is resident if he/she is domiciled in Uzbekistan on a permanent basis or physically present in Uzbekistan for at least 183 days in any consecutive 12-month period.
Tax Filing status - Joint filing is not permitted; spouses are taxed on a separate basis.
Taxable income - Taxable income includes wages and salaries (including work awards, 1-time bonuses, annual additional payments for holidays, etc.); benefits such as training, certain childcare services, catering and travel tickets or their compensation; and "other income" (e.g. awards, prizes, cash awards from competitions, contests, etc.). The following income is non-taxable: healthcare benefits, income from the sale of innovation patents, inheritances, insurance premiums and repayments, monthly compensation for a housing allowance, etc.
Taxation of Capital gains - Income derived by an individual from the sale of private property is exempt, unless the income is derived in the course of a commercial activity.
Tax Deductions and allowances - No
Other taxes on individuals:
Stamp duty - Stamp duty is levied on claims submitted to courts, notarial actions, state registration of legal entities and various licenses.
Real property tax - Land tax may be levied on individuals owning, possessing, renting or otherwise using land. The taxable base is the area of the land and the rate is 0.5%.
Capital duty - No
Capital acquisitions tax - No
Inheritance/estate tax - No
Net wealth/net worth tax - No
Uzbekistan Tax year - Uzbek tax year is the calendar year
Social security contributions - The employer must withhold from a resident employee's gross salary a 4% contribution to the pension fund. In addition, the individual can contribute to a voluntary pension savings fund.
Tax Filing and payment of tax - Employment income and passive income are taxed by withholding at source. For other types of income, an individual must submit an income declaration, with income assessed on the basis of the declaration. Filing and payment for such "declared income" is due by 1 April of the year following the calendar year.
Penalties - A 1% penalty is imposed for each day of delay but no more than 10% of the amount due.
Uzbekistan corporate tax rate is 9%.
Small and Medium sized businesses (SME) are entitled to single unified tax of 7%. Banks are taxed at rate 15%.
Residence - An entity is resident in Uzbekistan if it has completed the state registration procedure in Uzbekistan.
Tax Basis - Resident companies are subject to profit tax on their local and worldwide trading profits and other taxable income such as interest, royalties and rental income. Profit tax is also levied on Uzbek-source income of nonresidents operating through a permanent establishment (PE). Noncommercial organisations are generally exempt from profit tax, except on profits derived from entrepreneurial activities.
Micro-firms and small entities are eligible for simplified (unified) taxation on gross revenue, which replaces profit tax, VAT, property tax, land tax, social infrastructure development tax and the contribution to the republican road fund, school development fund and pension fund. Mining operations and related processing are subject to a mining tax and an excess profits tax (for specified items) and special fees ("subscription bonus", a 1-time fixed payment for exploration and extraction rights and a "commercial exploration bonus", payable for each commercial exploration of a location).
Taxable income - Taxable income is comprised of business and investment income and is calculated as the difference between aggregate income and deductible expenses. In general, expenses and deductions that are wholly and exclusively incurred for the purpose of a business are allowable. For other income sources, expenses may be deducted provided they are incurred wholly and exclusively in the production of the income.
Taxation of dividends - Dividends paid out of profits that have been subject to Uzbekistan tax are exempt from profit tax (by way of a deduction from taxable income) in the hands of residents and nonresidents with a PE in Uzbekistan. Profit tax is not imposed on income derived from state securities.
Capital gains tax - Capital gains are treated as ordinary income and subject to the standard rate of profit tax. However, tax liability on capital gains arises only when the gain is recorded on the books with regard to the sale of shares for a higher price.
Losses - Losses (which must be based on financial year results) may be carried forward for 5 years (except for losses incurred while the taxpayer was exempt from profit tax). The aggregate amount of losses carried forward in each subsequent year, however, cannot exceed 50% of taxable income of the current tax period. Loss carryback is not permitted.
Surtax - No
Alternative minimum tax - No
Participation exemption - No, but see "Taxation of dividends", above.
Holding company regime - No
Foreign tax credit - Foreign profit tax paid by an Uzbek resident company may be credited against Uzbek profit tax in accordance with an applicable tax treaty. A payment notification, a certificate of the foreign tax authorities or other document confirming payment of the foreign profit tax is acceptable proof to receive the credit.
Dividends - Dividends paid to a resident or nonresident are subject to a 10% withholding tax. The rate may be reduced under a tax treaty.
Interest - Interest paid to a resident or nonresident is subject to a 10% withholding tax, unless the rate is reduced under a tax treaty.
Royalties - Royalties and similar (e.g. lease payments) payments made to a nonresident are taxed at a rate of 20% unless reduced under a tax treaty.
Branch remittance tax - A branch and its head office are treated as independent entities, so any remittance from a branch to the head office is subject to a 10% net profit tax.
Other taxes on corporations:
Capital duty - No
Transfer tax - No
Real property tax - A 3.5% property tax is levied on fixed assets of a legal entity.
Payroll tax - A company must make a Unified Social Contribution (for purposes of the pension, employment and professional trade union funds) calculated on the salary of the employee at a rate of 25%.
Social security contributions - A company must contribute 1.5% of gross revenue to the pension fund (in addition to the Unified Social Contribution). Stamp duty - Stamp duty is levied on claims submitted to courts, notarial actions, state registration of legal entities and various licenses.
Other - Nonresidents are subject to withholding tax as follows: 10% for insurance premiums under insurance, со-insurance and reinsurance contracts; and 6% on payments for telecommunications services for international communications and income from transportation and shipping services. An 8% social infrastructure tax is levied on an entity's net profit (after corporate profit tax). The road fund receives both obligatory deductions (estimated monthly at 1.5% of gross revenue) and payments (on, e.g., the import of vehicles or the use of foreignregistered vehicles). A levy applied to the school development fund also is estimated monthly at the rate of 0.5 % of gross revenue.
Transfer pricing - The tax authorities may implement a market rate on revenue derived in related party transactions.
Thin capitalisation - No
Controlled foreign companies - No
Other - A state body performs special controlling functions to regulate monopolistic activities of entities (e.g. a listing of monopolistic companies, determination of anti-monopolistic sectors and the monitoring of prices).
Uzbekistan Tax year - Uzbek tax year is calendar year
Consolidated returns - Consolidated returns are not permitted; each company must file its own return.
Tax Filing requirements - Residents must file a quarterly return of corporate profit tax due no later than the 25th day of the month following the accounting quarter, and an annual return must be filed on/before 15 February following the reporting year. A payment equal to 1/3 of the estimated tax must be paid quarterly by Uzbek companies with foreign investment; the annual filing and final payment is due by 25 March after the close of the tax year.
Nonresidents that have a PE in Uzbekistan are required to file an annual return (by 25 March of the year following the accounting year) calculating the corporate profit tax due and reporting on the nature of the entities' activities. If the activities terminate before the end of the calendar year, the relevant documents should be filed within 1 month after termination.
Penalties - Penalties may be imposed for failing to register an activity; the fine is 50-100 times the monthly minimum wage or 10%-50% of earned revenue. The penalty for a late or missing return is 1% for each delayed day up to a maximum of 10% of the payment due. In addition, a 0.05% fine is charged for the late payment of tax liabilities.
Tax Incentives in Uzbekistan
Legal entities engaged in specific activities may be granted a temporary exemption from profit tax, property tax, certain social infrastructure taxes, the unified tax payment and obligatory payments to the road fund. Additionally, companies that expand general production capacity, reconstruct industrial structures, modernise production facilities and equipment, etc., may be eligible to reduce their taxable base by deducting expenses incurred for a period of 5 years.
Uzbekistan government stimulates internal production by number of sectors of the national economy and provides various tax incentives for local producers and net exporters:
- income, directed to capital investments and purchase of equipment, is exempt from profit and other taxes;
- income directed to recover loan and leasing proceeds shall be tax exempted to that amount;
- income received under the localization programs;
- income of companies, included into the National Investment Program or under PSA;
- income of EFI with amount of foreign investment above 300 thousand dollars (from 3-7 years);
- income of companies working in textile and automobile industry;
- agricultural firms shall be exempted for 3 years from the moment of registration;
- import of production equipment is exempt from import, VAT and property taxes;
- exporting companies (reduced tax from 15 to 50%);
SME and IFIs working in rural areas shall receive additional tax and other privileges.
Companies investing in mining sectors (oil&gas, etc.) could get 7 year tax holiday under special governmental acts. Companies, employing more than 50% of handicaps, are exempt from corporate tax.
Trading companies and food industry, using bank plastic cards shall receive a tax discount 10% of the current rate.
Foreign companies, getting profits in Uzbekistan without having a permanent tax status, shall be withheld with profit tax at source of payment. Private enterprises are taxed only one time (without tax on dividend).
The standard rate of VAT in Uzbekistan is 20%.
Certain services are not subject to VAT, including: transport for passengers (excluding taxi); medical, educational, tourist and excursion services; and financial and insurance services. Exempt items include certain technological equipment and certain imported property under individual agreements with the government. Supplies that are zero-rated include goods exported for hard currency; services for processing certain goods bound for export; and international transportation.
Taxable transactions - VAT is levied on the supply of goods and services and the import of goods.
VAT Registration - Micro-firms and small-size enterprises that are subject to simplified taxation are generally not payers of VAT, although they can opt to register and pay VAT on a voluntary base. Other legal entities are obliged to register with the local tax authorities within 10 days following registration with the state.
Filing and payment of VAT - Value Added Tax follows a calendar year, with quarterly reporting. Micro-firms and small-size enterprises report and pay Value Added Tax quarterly before the 25th day of the month following the reporting period. Other legal entities report and pay VAT on a monthly basis before 25th day of the month following the reporting period.
Income Tax Rate
Corporate Tax Rate
Sales Tax / VAT Rate
Last Update: Nov 2010
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