|Corporate Profits Tax Rate (%)||7.5 (a)|
|Capital Gains Tax Rate (%)||7.5 (a)|
|Permanent Establishment Tax Rate (%)||7.5 (a)|
|Branch Profits Tax Rate (Additional Tax) (%)||10 (b)|
|Withholding Tax (%) (c)|
|Royalties, Service Fees and Capital Gains||20 (e)|
|Net Operating Losses (Years)|
a) This is the general corporate profits tax rate. See Section B for other rates.
b) This tax is imposed on the net profits of permanent establishments after deduction of the profits tax.
c) The withholding taxes are generally considered to be final taxes.
d) The withholding tax is imposed on payments to Uzbek companies and individuals and to foreign companies without a permanent establishment in Uzbekistan.
e) The withholding tax is imposed on payments to foreign companies without a permanent establishment in Uzbekistan.
f) See Section C.
Taxes on corporate income and gains
Corporate profits tax. Most enterprises in Uzbekistan, including Uzbek companies with foreign participation, are subject to the general profits tax regime. Small businesses and retail and wholesale trading companies are subject to different regimes. Foreign companies that are deemed by the tax authorities to have a permanent establishment (PE) in Uzbekistan are taxable on profits derived from business activities of the PE in Uzbekistan (the taxable profits of a PE should not be less than 10% of deductions). The definition of a PE in Uzbek legislation is somewhat similar to the definition of a PE in the model treaty of the Organisation for Eco nomic Co-operation and Development (OECD), with certain exceptions. However, the legislation regarding the taxation and treatment of PEs in Uzbekistan is undeveloped.
Rates of corporate tax. The regular corporate profits tax rate is 7.5%. This rate also applies to Uzbek enterprises with foreign participation and to PEs of foreign companies. For commercial banks, the profits tax rate is 15%. A progressive scale of profits tax rates applies to mobile phone operators.
PEs are also subject to a 10% tax on their net profits after deduction of the corporate profits tax.
Foreign legal entities without a PE in Uzbekistan are subject to with holding tax on income derived from their activities in Uzbekistan. The following are the withholding tax rates.
|Nature of payment||Rate (%)|
|Dividends and interest||10|
|International communication and freight fees||6|
|Royalties, capital gains, rent and service
fees not connected with an Uzbek PE
Capital gains. Capital gains are generally included in taxable profits and are subject to tax at the regular corporate tax rate. Capital losses are generally deductible only if they are incurred on fixed assets used in production for at least three years. Capital gains derived by nonresidents from disposals of shares in Uzbek resident legal entities or real estate located in Uzbekistan are subject to withholding tax at the general rate of 20%.
Administration. The tax year is the calendar year.
Tax declarations must be filed quarterly by the 25th day of the month following the reporting quarter and annually by 15 February of the year following the tax year. Companies must file financial statements together with the tax declarations. Companies with foreign participation and PEs of foreign companies must file the annual declaration by 25 March.
The final tax liability must be paid by the deadline for filing the tax declarations. Quarterly estimates of the tax payable must be made by the 10th day of the 1st month of the quarter. Tax installment payments based on the estimates are required to be made by the 10th day of each month. Companies generating profits of less than 200 minimum monthly wages per reporting quarter (approximately USD10,000) are subject to profits tax based on actual quarterly profits and are not required to pay installments of profits tax.
On written request, excess payments of tax must be refunded within a 30-day period or be offset against other tax liabilities. In practice, it is difficult to obtain refunds of overpayments of tax.
Dividends. Dividends, including those paid to domestic enterprises, are subject to a withholding tax at a rate of 10%. Dividends receiv ed by a legal entity and reinvested into the charter capital of the payer of the dividends are exempt from tax (unless withdrawn or liquidated within a year after the exemption).
Foreign tax relief. Under the double tax treaties of Uzbekistan, a foreign tax credit is available for foreign tax paid on income earned abroad (subject to certain documentary requirements).
Determination of trading income
General. Taxable profits are equal to the annual net profits disclosed in the company’s Uzbek financial statements, as adjusted by the tax law. Financial statements must be prepared on an accrual basis and be supported by documentation. The following are the most significant items that are not deductible for tax purposes:
- Nonbusiness expenses
- Entertainment, business travel and voluntary insurance expenses in excess of (low) statutory limits
- Interest on overdue and deferred loans (in excess of normal loan interest rate)
- Losses resulting from misappropriations of funds or assets
- Audit expenses, if an annual audit was conducted more than once for the same period
- Certain benefits to employees
- Charitable donations
- Litigation expenses
Special deductions. Taxable profits may be reduced by certain spe cial deductions, including the following:
- Amounts reinvested in main production in the form of new construction and reconstruction of buildings and facilities used for production needs and new technological equipment (less current depreciation) over a certain time period, subject to other conditions, up to 30% of taxable profits
- Charitable donations of up to 2% of taxable profits
Provisions. Banks may deduct loan loss provisions within the limits established by the Central Bank of the Republic of Uzbekistan.
Tax depreciation. The following are the applicable depreciation rates in Uzbekistan.
|Buildings and structures||5|
|Trains, ships, airplanes, pipelines, communication equipment and electric power lines and equipment||8|
|Production machinery and equipment||15|
|Cars, computers and office equipment||20|
|All other assets||15|
Intangible assets are amortized for tax purposes over the useful life of an asset, the life of the company or five years (if useful life cannot be determined), whichever is less.
Relief for losses. Tax losses can be carried forward for five years. However, the amount of losses carried forward that may be de – ducted each year is subject to a limit of 50% of taxable profits for the year. Losses incurred during a profits tax exemption period cannot be carried forward.
Groups of companies. The tax law does not allow the offsetting of profits and losses among members of a tax group.
Other significant taxes
The following table summarizes other significant taxes.
|Nature of tax||Rate|
|Value-added tax (VAT), on the supply of all
goods and services, including imports, unless
they are zero-rated or exempt
|Excise tax; imposed on an extensive number of specified goods produced in Uzbekistan or imported into Uzbekistan; goods subject to tax include oil and gas products, alcohol,
tobacco, jewelry, silverware and cars
|Property tax; imposed on the annual average
depreciated value of tangible fixed assets
and certain other assets; land is exempt
|Infrastructure development tax; imposed on
net (after-tax) profits
|Subsurface use tax; imposed on the extraction
of natural resources; tax imposed on the sales
price of extracted natural resources and
components and on waste derived from the
extraction or processing of natural resources
|Sales||2.6% to 30%|
|Waste||0.78% to 9%|
|Excess profits tax; imposed on the difference
between the actual net sales price and the
established threshold price for certain natural
resources and products
|Signing and commercial discovery bonuses
for subsurface users; payable to the state
budget through the tax authorities
|Road Use Fund contribution; imposed on
sales turnover, excluding VAT and excise
tax, and on purchases of motor vehicles
|General rate on turnover||1.40%|
|Purchases of cars and other vehicles||Various (minimum rate of 3% for new cars and other vehicles)|
|Water use tax; rates per cubic meter|
|Land tax; imposed at a fixed rate per
hectare, which varies depending on the
location, quality and purpose of the
land plot; rate in Zone 1 of Tashkent
|Education and Healthcare Development
contribution; imposed on sales turnover,
excluding VAT and excise tax
|Social fund contributions|
|Pension Fund; paid by|
|Employers; imposed on sales, excluding VAT
and excise tax
|Employees (withheld from salaries of
|Unified Social Payment; payable by employers|
|On the total payroll of small businesses||15.00%|
|On the total payroll of all other entities||25.00%|
|Contributions to individual accumulative pension accounts of citizens (maintained at Peoples Bank); payable by employers on salaries of local employees; amounts of the contributions are deducted from
the amounts of accrued individual income tax
The currency in Uzbekistan is the Uzbek som (UZS).
Uzbekistan imposes various foreign-exchange controls, including the following:
- Restrictions on purchases of foreign currencies, which are subject to the availability of foreign currencies in authorized banks
- Mandatory sales of 50% of foreign-currency revenues of companies to their servicing banks (with some exceptions)
- Mandatory exchange rates set weekly by the Central Bank of the Republic of Uzbekistan for accounting, reporting, tax and customs duty calculations
- Strict control over payments in foreign currencies to parties outside Uzbekistan
- Limitations on the circulation of foreign currencies in Uzbekistan, and limitations on the domestic foreign currencies markets
Uzbek resident individuals may freely export up to the equiv alent of USD2,000 of foreign currency. Nonresident individuals may export any cash legally imported and supported by a customs declaration. These limits may be increased by amounts withdrawn from foreign-currency accounts in Uzbekistan if proper documentation is provided.
Treaty withholding tax rates
The following table lists the withholding rates under Uzbekistan’s tax treaties.
|Dividends (l)||Interest (l)||Royalties|
|Payee resident in||%||%||%|
|Canada||5/15 (a)||10||5/10 (e)|
|Czech Republic||5/10 (b)||5||10|
|Finland||5/15 (a)||5||0/5/10 (f)|
|France||5/10 (a)||0/5 (d)||0|
|Germany||5/15 (b)||5||3/5 (g)|
|Japan (k)||15 (l)||10||0/10 (i)|
|Korea (South)||5/15 (b)||5||2/5 (j)|
|Switzerland||5/15 (c)||0/5 (d)||5|
|United Arab Emirates||5/15 (b)||10||10|
|United Kingdom||5/10 (a)||5||5|
a) The lower rate applies if the beneficial owner of the dividends is a company that owns at least 10% of the payer of the dividends.
b) The lower rate applies if the beneficial owner of the dividends is a company that owns at least 25% of the payer of the dividends.
c) The lower rate applies if the beneficial owner of the dividends is a company that owns at least 20% of the payer of the dividends.
d) The 0% rate applies to interest with respect to the following:
- Loans made, guaranteed or insured by the government of the other contracting state or an instrumentality or agency thereof
- Sales on credit of industrial, commercial or scientific equipment
- Sales on credit of merchandise between enterprises
- Bank loans
e) The 5% rate applies to royalties paid for certain cultural works (with exceptions) as well as for the use of, or the right to use, computer software or patents or for information concerning industrial, commercial or scientific experience (know-how), with exceptions.
f) The 0% rate applies to royalties for the use of, or the right to use, computer software, patents, designs or models, or plans. The 5% rate applies to royalties paid for the use of, or the right to use, secret formulas or processes, or for information concerning industrial, commercial or scientific experience (know-how). The 10% rate applies to royalties paid for trademarks or certain cultural works.
g) The 3% rate applies to royalties paid for the use of, or the right to use, copyrights of scientific works, patents, trademarks, designs or models, plans, or secret formulas or processes, as well as for the disclosure of industrial, commercial, or scientific knowledge. The 5% rate applies to royalties paid for certain cultural works.
h) The 5% rate applies to royalties paid for certain cultural works (with exceptions).
i) The 0% rate applies to royalties paid for the use of, or the right to use, copyrights of literary, artistic or scientific works, including motion picture films.
j) The 2% rate applies to royalties for the use of, or the right to use, industrial, commercial, or scientific equipment.
k) These are the withholding tax rates under the USSR-Japan treaty, which is honored by Uzbekistan.
l) The domestic withholding tax rate for dividends and interest in Uzbekistan is 10%. Consequently, the withholding tax rate of 15% for dividends and interest under treaties does not apply to payments made by Uzbek companies.