A tax return and activity report should be filed with the tax authorities by February 15. An audit opinion or an agreement for audit services should also be submitted by the appropriate deadline.
Social charges
Employers must make social insurance and employment fund contributions, as well as contributions to a trade union if applicable. The total amount payable, which is deductible for profits tax purposes, is 38% to 40% of each employee's gross salary, made up as follows:
Fund Rate
Social insurance 36%
employment 2%
Trade union (if applicable) 2%
Individual Taxation
A resident is defined as an individual who is physically present in Uzbekistan for 183 days or more in a calendar year. Residents are taxed on their worldwide income, while non‑residents are taxed only on their Uzbek sources income.
Taxable income for 1995 and 1996 is taxed at the following rates:
Taxable income (less annual non‑taxable minimum)
Up to 2 annual minimum wage 15%
2 to 5 annual minimum wage 25%
5 to 10 annual minimum wage 35%
Over 10 times annual minimum wage 40%
Social security contributions
1% of the gross salary to the Social Insurance Fund.
Deductions and Exemptions
All income is taxable in Uzbekistan unless it is specifically exempt. The list of specifically exempt income includes alimony, gift, severance and pension income.
Capital gains
Capital gains in the disposal of shares are exempt for taxation. Capital losses are not deductible.
Other taxes and fees
Value Added Tax ("VAT")
VAT was introduced in Uzbekistan on February 15, 1991. The current rate is 17%.
VAT is levied on turnover from the supply of all goods and services (including barter transactions), unless they are specifically exempt. Imports are exempt. Though, VAT is levied on the Uzbek seller's markup of imported goods. Exported goods and services are specifically exempt from VAT. Exported goods are defined as having cleared customs. Exported services are defined as being supplied to a "foreign person". For the determination of whether services are exported, neither the place of providing the services not the place where the benefits are used are considered, only that the purchaser is a foreign person (entity). It could be argued that Uzbek VAT legislation allows representative offices of foreign legal entities (which are non‑resident), paying for services in foreign currency through authorized Uzbek banks to also be classified as "foreign person".
Effective January 1 1996, the exemption on exported goods and services is only applicable if the importing country does not impose VAT on exports to Uzbekistan. This restriction is especially important with respect to some members of the CIS as VAT is charged on exports to member states.
The VAT legislation of Uzbekistan allows a credit for VAT incurred, when such goods or services are "charged to the cost of production".
Excise taxes
Excise taxes are payable by domestic producers and importers of excised goods. The list of excised goods is determined by the Cabinet of Ministers and includes tobacco, jewelry, gasoline, liquor and other goods. Exported goods are exempt. Tax rate vary from 5% to 75%. The amount of excise tax is determined by the taxpayer, based on the volume of goods sold and established tax rates on such goods.
Property tax
The 2% rate tax is based on the historical cost of fixed assets used in production. Legislation specifically includes buildings, machinery, equipment and vehicles. Accumulated depreciation does not reduce the taxable base. The following assets are specifically excluded from he taxable base for property tax purposes:
‑ housing, social and cultural facilities;
‑ environmental protection assets;
‑ agricultural equipment;
‑ transportation networks (including roads and pipeline);
‑ communication and power transmission lines (including
‑ maintenance structures);
‑ communication satellites; and
‑ automobiles.
Profit tax is deductible for profits tax purposes.
Subsurface use tax
Taxes on the mining, and oil and gas industries. Subsurface uses tax is deductible for profits tax purposes.
Land tax
A fee on land owners is imposed at a fixed rate per hectare.
Vehicle fees
A minimal fee on motor vehicle owners is imposed at a fixed rate per horsepower. Individuals must also pay this fee, though only at half the corporate rate. Only vehicles registered for road use are subject to this tax (e.g. not those used for production which would be subject to property tax).
In addition there is a fee on the purchase of vehicles, defined as a percentage of the purchase price of the vehicle excluding VAT or duties, 5% for cars and 10% for trucks, buses, trailers and semi‑trailers.
Road use tax
All entities are subject to road use tax which is applied to gross sales, excluding VAT and excises. For transportation companies a rate of 2% and for all other companies a rate of 1% applies. The tax is deductible for profits tax purposes.
Water use fee
There is a nominal charge for the use of water resources at a fixed rate per cubic meter of water consumed. For most companies, the rate is 0.09 soum per cubic meter. The fee is deductible for profits tax purposes within statutory water use limits.
Local taxes
There are numerous different taxes, though most are insignificant except for the administrative burden. Example of more significant local taxes include:
C Tax on advertising costs. In Tashkent the rate is 5% of total expense.
C Fee for cleaning the local territory, payable by entities and individuals conducting entrepreneurial activities. In Tashkent the rate is 0.5% of gross receipts.
C Fee for the right to trade, payable by entities and individuals conducting retail trade. In Tashkent the rate is two minimum monthly wages per month.
Revenue collection problems13
C High tax rates on modest tax bases reduced not only by economic contraction but also by various exemptions.
C Weak tax administration compounded by corruption.
C The effective tax burden on those who comply with the tax code is increased since large numbers of taxpayers successfully evade taxes ‑ equity and efficiency problems.
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