Uzbekistan Tax Regime

Uzbekistan operates a modernised corporate income tax (CIT) system codified in a unified Tax Code, with a standard 15% rate that is materially lower than most regional and OECD comparators, alongside an elevated 20% rate for commercial banks, cement (clinker) and polyethylene granule producers, mobile services providers, and markets and shopping malls. A widely used optional turnover tax regime substitutes for both CIT and VAT for smaller legal entities and individual entrepreneurs below defined turnover thresholds, reflecting the government's continuing effort to formalise the economy while keeping compliance costs low for small business. The regime continues to be shaped by presidential decrees and Cabinet resolutions granting sector and free-economic-zone incentives, on top of the Tax Code's general rules, and the government has been progressively withdrawing blanket export incentives in favour of a broader, flatter tax base. Uzbekistan is not within the scope of the OECD Pillar Two global minimum tax regime for domestic groups.

1.1 Sources

1.2 Recent developments

From 1 January 2025, the 0% CIT rate previously available for export of goods and services was abolished, and export income is now folded into the base for turnover tax rather than benefiting from a standalone incentive rate — part of a broader shift toward rate uniformity and away from blanket export subsidies. Also from 1 January 2025, the reduced 1% turnover tax rate previously available to legal entities located in established touristic zones was withdrawn. The reporting period for turnover tax was shortened from quarterly to monthly, increasing the compliance cadence for small-business taxpayers. For 2026, the government plans increased rates for companies engaged in e-commerce (including marketplaces, online stores and subscription services): corporate income tax rising from 10% to 15% and turnover tax from 3% to 4%, aligning e-commerce taxation more closely with the general regime as the sector matures.

Headline statutory corporate income tax rate for a resident company. Where sub-national (state, provincial, cantonal or municipal) corporate taxes apply, the combined rate reported by the OECD is shown. Projected 2026–2028 rates carry the current rate forward unless a change is already enacted or officially scheduled. As-of 2026.

Top marginal statutory personal income tax rate on employment income for a resident individual. Where sub-national (state, provincial, cantonal or municipal) income taxes are a standard part of the system, the combined top rate is shown. Projected 2026–2028 rates carry the current rate forward unless a change is already enacted or officially scheduled. As-of 2026.

2.1 Rates and residence

Resident corporations are taxed on worldwide income; non-resident corporations are taxed either directly at the level of an Uzbek permanent establishment (PE), if one exists, or by withholding tax at source on Uzbek-source income where there is no PE. CIT is charged on taxable profit, computed as the difference between gross income and deductible expenses, reduced by any incentives available under the Tax Code, other laws, or presidential decrees. The standard CIT rate is 15% for most enterprises. An elevated 20% rate applies to commercial banks, producers of cement (clinker) and polyethylene granules, mobile services providers, and operators of markets and shopping malls — sectors identified by the government as having above-average margins or market power. A 50% rate reduction is available to: (i) turnover-tax payers switching to the general CIT regime for the first time after 1 September 2022, for the tax period of the switch, provided turnover in that period does not exceed UZS 10 billion; and (ii) CIT payers whose revenue first exceeds UZS 10 billion in a tax period after 1 September 2022, for that period and the following period, provided revenue in the period the reduced rate applies does not exceed UZS 100 billion — a graduated glide path intended to soften the transition for growing businesses.

An optional simplified turnover tax regime is available to legal entities with annual turnover below UZS 1 billion and to individual entrepreneurs with turnover between UZS 100 million and UZS 1 billion. Under this regime, turnover tax replaces both CIT and VAT. The general turnover tax rate is 4%, though sector-specific rates ranging from 1% to 25% apply depending on the type of entity and services provided; the reduced 1% rate for touristic-zone entities was withdrawn from 1 January 2025. Turnover taxpayers whose annual revenue exceeds UZS 1 billion during the year automatically become subject to the general CIT/VAT regime from the month following the month in which the threshold was exceeded. Importers, producers of excise-liable goods, subsurface-extraction operators, and sellers of petrol and diesel/gas fuel are ineligible for turnover tax regardless of size.

2.2 Dividends and participation

Dividends received by a resident company from another resident company are generally taxed at source by withholding rather than included again in the recipient's CIT base, avoiding a full second layer of entity-level tax on domestic distributions. Dividends received from foreign subsidiaries are generally included in the resident recipient's worldwide taxable income, with relief for underlying foreign tax available under an applicable double tax treaty or Uzbekistan's unilateral foreign tax credit provisions, subject to Tax Code documentation requirements. There is no broad EU-style participation exemption; group relief for cross-border holding structures depends on treaty relief and the specific incentive regimes available to holding and investment activity in free economic zones.

2.3 Income determination and deductions

Gross income includes revenue from the sale of goods and services, property income, and other economic benefits, unless specifically exempt under the Tax Code. Deductible expenses must be economically justified and documented, generally following the taxpayer's statutory accounting records adjusted for tax purposes; non-deductible items include most entertainment and representation costs above prescribed limits, fines and penalties paid to the state budget, and expenditure not connected with income-generating activity. Depreciation is computed by prescribed asset categories at declining-balance rates set in the Tax Code (typically ranging from around 5% for buildings and structures to 15–20% for machinery, equipment and vehicles, and higher rates for computers and office equipment), with taxpayers permitted to apply accelerated rates within statutory caps for certain categories.

2.4 Interest limitation

Interest expense is deductible where incurred for business purposes and priced on arm's-length terms; thin-capitalisation-style restrictions limit the deductibility of interest paid to related-party lenders where the debt-to-equity ratio exceeds prescribed limits, with excess interest treated as a non-deductible distribution. Interest paid to non-residents without an Uzbek PE is additionally subject to withholding tax at source, layering source-country tax on top of any payer-side deduction restriction.

2.5 Losses

Tax losses may generally be carried forward for up to five years (ten years for investment projects implemented under specified government programmes) to offset future taxable profits, subject to continuity-of-business conditions; there is no carryback of losses under the general regime. Loss carryforward for turnover taxpayers is not applicable in the same way, since turnover tax is levied on gross receipts rather than net profit.

2.6 Group taxation

Uzbekistan does not operate a general fiscal-consolidation or group-relief regime; each legal entity is assessed and files CIT or turnover tax independently, and losses of one group member cannot be offset against the taxable profits of another Uzbek entity. Intra-group transactions, including financing, management services and licensing, are subject to the general transfer-pricing and related-party deductibility rules described below.

2.7 Controlled foreign companies and anti-avoidance

Uzbekistan has introduced controlled foreign company (CFC) rules requiring resident controlling persons — both corporate and individual — to include in their taxable base a proportionate share of the undistributed profits of a low-taxed foreign company they control, subject to de minimis profit thresholds and exemptions for CFCs with adequate substance or an effective tax rate above a specified threshold in their jurisdiction of incorporation. General anti-avoidance provisions in the Tax Code allow the tax authorities to recharacterise transactions lacking economic substance or entered into primarily to obtain a tax benefit.

2.8 Transfer pricing

Related-party and other controlled transactions must be conducted on arm's-length terms, tested under OECD-aligned methods (comparable uncontrolled price, resale price, cost-plus, transactional net margin and profit split) codified in the Tax Code. Taxpayers engaging in controlled transactions above prescribed value thresholds must file transfer-pricing notifications and maintain supporting documentation, and large multinational groups are subject to country-by-country reporting obligations consistent with Uzbekistan's participation in international exchange-of-information standards. The tax authorities can adjust taxable profit where related-party pricing departs from the arm's-length standard.

2.9 Incentives

Resident and foreign investors operating in Uzbekistan's free economic zones, small industrial zones and technology parks can benefit from CIT holidays or reduced rates (typically for periods of three to ten years depending on investment size and zone), customs duty exemptions on imported equipment and raw materials, and property and land tax relief, under Cabinet resolutions and presidential decrees establishing each zone. The general Tax Code also provides accelerated depreciation for qualifying capital investment and investment tax credits for enterprises undertaking modernisation and technical re-equipment projects. The abolition of the blanket 0% export CIT rate from 1 January 2025 means exporters must now rely on zone-based or investment-linked incentives rather than an automatic export incentive.

2.10 Pillar Two

Uzbekistan has not enacted Pillar Two (global anti-base-erosion) legislation, and no Uzbekistan-parented group is currently known to exceed the EUR 750 million consolidated-revenue threshold that would trigger scope. Multinational groups headquartered in Pillar Two jurisdictions with Uzbek subsidiaries — particularly those benefiting from free-economic-zone tax holidays or the 50% CIT-rate reduction for growing businesses — should model potential top-up tax exposure at the level of their ultimate parent, since these incentives can produce effective rates below the 15% global minimum.

2.11 Branch income and reorganisations

A branch or other PE of a foreign company is taxed on Uzbek-source profits attributable to the PE at the standard 15% rate (20% where the branch's activity falls within one of the elevated-rate sectors), computed on the same gross-income-less-deductions basis as a resident company; in addition, part nine of article 347 of the Tax Code equates the net profit remaining at the non-resident's disposal after payment of that tax to a dividend and taxes it at the 10% rate set by point 1 of article 353, so a branch bears a second layer of Uzbek tax in the same way a subsidiary's distributions do. That charge is imposed on a deemed-distribution basis and applies whether or not the profit is actually remitted to the head office; the non-resident may claim a lower treaty dividend rate under part ten of article 347, following the certification procedure in article 357. Parts nine to eleven were introduced by Law No. ZRU-741 of 29 December 2021 with effect from 1 January 2022, and treaty access was added by Law No. ZRU-812 of 30 December 2022 with effect from 1 January 2023. Domestic mergers, demergers and reorganisations are governed principally by civil and company law, with tax consequences following the Tax Code's general rules on recognition of gains on asset transfers; there is no comprehensive tax-neutral reorganisation regime comparable to EU merger directive relief, so restructurings involving asset transfers should be planned around recognition and property/land transfer tax triggers.

3.1 Residence and rates

Individuals present in Uzbekistan for 183 days or more in any consecutive 12-month period are tax resident and taxed on worldwide income; non-residents are taxed only on Uzbek-source income. Uzbekistan applies a flat personal income tax (PIT) rate of 12% to employment income and most other categories of personal income for both residents and non-residents, a rate that has remained stable as a core plank of the country's simplified tax policy since the comprehensive tax reform of 2019. Certain categories of income, including specified social benefits and pensions, are exempt from PIT, and a modest tax-free minimum applies to low-income employment.

3.2 Capital income and real estate

Dividends and interest paid to resident individuals are generally subject to withholding tax at source at a preferential rate below the standard 12% PIT rate (commonly 5% for dividends and interest), which is typically final. Capital gains on the sale of real estate and securities by individuals are generally taxable, with exemptions available for the sale of a sole residential property held for the qualifying period and for gains on listed securities traded on the Uzbek stock exchange in specified circumstances. Rental income received by individuals is taxable at the standard PIT rate, with a simplified fixed-payment option available in some regions for small-scale residential leasing.

3.3 Social security and payroll

Employers are responsible for a unified social payment (mandatory social insurance contribution) calculated on the gross payroll, with the standard rate around 12% of payroll for most employers (a reduced rate of 1% applies to budget-funded organisations and certain other categories specified in the Tax Code). Individual employees do not separately bear a matching social insurance contribution comparable to Western European systems, as the unified social payment is an employer-borne levy; employers withhold and remit the flat 12% PIT monthly through payroll along with the unified social payment.

3.4 Inbound individuals

There is no net wealth tax and no general inheritance tax; gift and inheritance transfers of certain property may attract state duty on registration rather than a dedicated inheritance tax. Expatriates working in Uzbekistan are taxed under the same flat 12% PIT rate as residents once they meet the residence test, with relief for double taxation available under an applicable treaty. Foreign personnel and investors should note that currency-control formalities, while progressively liberalised, can still affect the practical mechanics of remitting employment income and investment returns out of Uzbekistan.

Uzbekistan levies withholding tax on Uzbek-source payments to non-residents without a local PE: dividends and interest are generally withheld at 10%, and royalties at 20%, with insurance and reinsurance premiums, international transportation income and other specified payment categories subject to their own withholding rates under the Tax Code. Payments to non-residents in low-tax or offshore jurisdictions designated on Uzbekistan's official list can attract elevated withholding rates as an anti-avoidance measure. Uzbekistan's double tax treaty network — covering key trading and investment partners across the CIS, Europe and Asia — typically reduces treaty-country dividend and interest withholding to around 5–10% and royalties to 0–15%, subject to beneficial-ownership and substance requirements and completion of residence-certification formalities with the State Tax Committee.

Relief under a treaty generally requires the non-resident recipient to provide a valid certificate of tax residence to the Uzbek payer in advance of payment; absent timely documentation, the payer must withhold at the full domestic rate, with refund available on subsequent application supported by residence and beneficial-ownership evidence. A permanent establishment's after-tax net profit is itself equated to a dividend under part nine of article 347 and taxed at the same 10% rate in point 1 of article 353 that applies to dividends paid to a non-resident by a locally incorporated subsidiary, so choosing a branch over a subsidiary does not avoid the second layer of tax; the reduced treaty rate for dividends may be claimed under part ten of article 347 in the manner prescribed by article 357.

5.1 General anti-abuse and substance

The Tax Code empowers the tax authorities to disregard or recharacterise transactions and structures that lack economic substance or are entered into primarily to obtain a tax advantage, applying a substance-over-form standard consistent with broader international anti-avoidance practice. Treaty relief requires the recipient to be the beneficial owner of the relevant income, and the tax authorities scrutinise conduit and intermediary holding structures accordingly, particularly where the recipient is resident in a jurisdiction with which Uzbekistan has a limited economic relationship beyond the treaty benefit sought.

5.2 CFC rules and exchange of information

The controlled foreign company regime summarised in section 2.7 requires Uzbek resident controlling persons to report their interests in foreign companies and to include a proportionate share of undistributed low-taxed profits in their taxable base, subject to substance and effective-tax-rate exemptions. Uzbekistan participates in international automatic exchange of financial account information and country-by-country reporting for large multinational groups, supporting enforcement of both the CFC regime and the general transfer-pricing rules described in section 2.8.

6.1 VAT

VAT is levied at a standard rate of 12% on the supply of goods and services in Uzbekistan and on imports, with zero-rating for exports and certain international transport services, and exemptions covering specified financial services, medical services and educational services. Registration as a VAT payer is mandatory for general-regime taxpayers above the turnover-tax eligibility threshold (broadly, entities with annual turnover of UZS 1 billion or more, other than those specifically excluded from turnover tax regardless of size); entities using the optional turnover tax regime described in section 2.1 do not separately register for or charge VAT, since turnover tax substitutes for it. VAT returns are filed monthly, and input VAT is recoverable against output VAT for taxable business activities subject to standard invoicing requirements, including mandatory electronic invoicing for most VAT payers.

6.2 Property, land and other taxes

Property tax applies annually to the value of buildings and other immovable property owned by legal entities, generally at a rate around 1.5% of the average annual residual (book) value, with elevated rates for underused or unused property and for property held by non-resident entities without a PE. Land tax applies annually to landholders based on the category, location and area of the land parcel, at fixed rates set by local authorities and adjusted for land quality. Excise duty applies to alcohol, tobacco, petroleum products and certain imported and luxury goods. A subsurface-use (mineral extraction) tax applies to holders of mining and hydrocarbon licences, calculated as a percentage of the value of extracted resources, with rates varying by mineral type. There is no net wealth tax and no separate stamp duty regime beyond state duties charged on specified registrations and notarial acts.

7.1 Filing, assessment and audit

The tax year is the calendar year. CIT returns are filed annually, generally by 1 March of the following year, with quarterly advance payments due during the year for larger taxpayers based on projected or prior-year liability; smaller taxpayers may pay CIT based on actual quarterly results without advance payments. Turnover tax returns are filed monthly, reflecting the shortened reporting period introduced in recent years. The State Tax Committee conducts risk-based desk and field audits, with an increasing reliance on electronic invoicing and cash-register data analytics to identify under-reporting. The general statute of limitations for assessment is five years, extendable in cases of tax evasion.

7.2 Rulings, appeals and penalties

Taxpayers may request written clarifications from the State Tax Committee on the application of the Tax Code to specific transactions, which provide a degree of protection from penalties where followed in good faith. Assessments may be appealed administratively to a higher tax authority and, if unresolved, to the economic courts. Interest accrues on late-paid tax, and penalties apply for late filing, under-declaration and failure to register for VAT or the turnover tax regime as applicable, with more severe sanctions for deliberate evasion. Double tax treaties provide for mutual agreement procedures to resolve cross-border disputes and eliminate double taxation.

Turnover taxpayers that exceed the UZS 1 billion annual revenue threshold during the year must switch to the general CIT/VAT regime from the month following the month the threshold was exceeded, which shifts both the filing frequency and the underlying tax base mid-year and should be monitored closely by fast-growing small businesses.

9.1 Entity choice

The limited liability company (LLC) is the standard vehicle for both domestic and foreign investment, with straightforward incorporation, no onerous minimum capital requirement for most activities, and full CIT status at the standard 15% rate (or 20% for the specified elevated-rate sectors). Joint-stock companies suit larger or capital-market-oriented ventures. A branch or representative office of a foreign company can operate without local incorporation, with a branch taxed at the standard or sector rate on attributable Uzbek-source profits and a representative office generally restricted to non-commercial liaison activities. Free-economic-zone resident status is available to qualifying LLCs and joint-stock companies undertaking priority manufacturing or export activities within a designated zone.

9.2 Structuring and incentives

Investors below the UZS 1 billion turnover threshold should weigh the simplicity of the turnover tax regime (a single rate substituting for CIT and VAT) against the loss of input VAT recovery and the automatic switch to the general regime once the threshold is exceeded. Manufacturing and export-oriented investors should evaluate free-economic-zone and industrial-park status for CIT holidays, customs relief and property/land tax exemptions, particularly following the withdrawal of the blanket 0% export CIT rate from 1 January 2025. Related-party financing, management-fee and licensing arrangements should be priced on an arm's-length basis and documented from the outset given active transfer-pricing enforcement and the CFC reporting obligations described in sections 2.7 and 5.2. Fast-growing businesses should plan for the 50% CIT-rate reduction available on first crossing the UZS 10 billion revenue threshold, which can meaningfully smooth the transition out of turnover tax or preferential rates.

9.3 Worked effective-rate illustration

An Uzbek LLC in a standard-rate sector earns EBITDA of UZS 5,000,000,000, books depreciation of UZS 700,000,000 and net interest expense of UZS 400,000,000, both fully deductible under the general rules. Taxable profit is 5,000,000,000 − 700,000,000 − 400,000,000 = UZS 3,900,000,000. CIT at the standard 15% rate is UZS 585,000,000, an effective rate of 585,000,000 / 3,900,000,000 = 15.0% on taxable profit. If the after-tax profit of UZS 3,315,000,000 were fully distributed to a non-resident corporate shareholder, dividend withholding tax of 10% would apply, i.e. UZS 331,500,000, giving a combined burden on distributed profits of 15% + (85% × 10%) = 23.5% before any treaty reduction. If the same company instead qualified as a resident of a free economic zone with a five-year CIT holiday, the corporate-level burden on the same UZS 3,900,000,000 would fall to zero for the holiday period, with only the 10% dividend withholding applying on distribution — illustrating the materiality of zone incentives for qualifying greenfield investment.

9.4 Compliance

Expect mandatory electronic invoicing for VAT payers, monthly VAT or turnover tax compliance, quarterly CIT advances for larger taxpayers reconciled on the annual return, transfer-pricing notification and documentation for controlled transactions above prescribed thresholds, and CFC reporting for resident controlling persons of foreign companies. Businesses should monitor the UZS 1 billion turnover-tax threshold and the UZS 10 billion and UZS 100 billion CIT-rate-reduction thresholds closely, since crossing them triggers automatic and, in some cases, immediate changes to the applicable tax regime and rate.