Uzbekistan: tax updates effective from 2026 

In December 2025, a series of legislative acts were adopted introducing several amendments and clarifications to the Tax Code of the Republic of Uzbekistan (hereinafter, the “Tax Code”)¹. Unless stated otherwise, the amendments will become effective as of 1 January 2026.

Some of the amendments introduced by these legislative acts had already been communicated earlier in 2025 as part of the Budget Message for 2026–2028, as well as through Presidential Resolutions of the Republic of Uzbekistan (including, inter alia, Resolution No. PP‑247 dated 12 August 2025, “On Measures to Create Favorable Conditions for Individual Entrepreneurs and Self‑Employed Persons,” and Resolution No. PP‑320 dated 30 October 2025, “On Additional Measures to Support Projects Based on Artificial Intelligence Technologies”). These amendments have now been formally incorporated into the legislation of the Republic of Uzbekistan (hereinafter, “RUz”). Furthermore, a number of amendments that were not envisaged in the Budget Message for 2026–2028 were publicly announced for the first time, while certain initiatives outlined therein were not reflected in the adopted legislative amendments.

In addition, Presidential Decree No. UP‑246 dated 10 December 2025, “On Additional Measures Aimed at Promoting Non‑Cash Payments and Reducing the Shadow Economy” introduces several significant tax‑related measures that have not yet been incorporated into the Tax Code. Pursuant to paragraph 17 of the Decree, the Ministry of Economy and Finance of the RUz, together with the relevant ministries and agencies, has been instructed to submit proposals for corresponding amendments and additions to the legislation to the Cabinet of Ministers of the RUz within two months.

Tax Administration and Transfer Pricing (TP):

Self‑employed individuals who sell goods or provide services are required to issue electronic Value Added Tax (VAT) invoices equally to legal entities and individual entrepreneurs.

Amendments have been introduced whereby tax authorities will automatically prepare tax returns for the following taxes:

• Personal Income Tax (PIT);
• Social Tax;
• VAT;
• Turnover Tax.

Taxpayers remain responsible for the accuracy of all reported data and are provided with five business days to make any necessary corrections to the tax returns. Previously, the automatic preparation of VAT and Turnover Tax reports was done by tax authorities at the request of a taxpayer. The procedure for the automatic preparation of Property Tax and Land Tax returns in the system for legal entities remains unchanged.

The tax authorities have the right to collect outstanding tax liabilities from taxpayers’ debtors. For this purpose, a specific mechanism has been introduced allowing a creditor taxpayer to apply to the tax authorities for such collection.

It is stipulated that a TP compliance check is treated as a tax inspection, on the same footing as a desk tax inspection, on-site tax audit, and tax audit. For example, this may imply that such TP inspections cannot be carried out (other than those conducted within criminal proceedings) where a subject of entrepreneurial activities falls within the “AAA” category of high sustainability rating (except for state-owned enterprises and legal entities with a state ownership interest of 50% or more of the charter capital). Nevertheless, as before, TP inspections may be conducted exclusively by the Tax Committee of the RUz.

Amendments have been introduced to exclude the performance of pre-audit analysis by the tax authorities for any tax period in respect of which a tax inspection / audit has already been completed or is currently in progress. In addition, conducting a desk tax inspection for the same taxes and the same tax (reporting) period is no longer permitted, except where new circumstances are identified that were not known to the tax authorities at the time the original desk inspection was carried out.

The following new penalties have been introduced:

• For the sale of goods or the provision of services without the use of electronic payment systems and/or special QR codes generated on the digital platforms of payment service providers, where such systems and/or QR codes are mandatory — in the amount of UZS 5 million;
• For the use by a taxpayer of special QR codes belonging to other registered taxpayers, generated on the digital platforms of payment service providers — in the amount of UZS 20 million.

VAT:

VAT payer’s activity of receiving funds in the form of penalties collected from legal entities and individuals in favor of authorized state bodies is recognized as the provision of services to such authorized state body for consideration. For VAT purposes, the tax base is determined based on the amount of remuneration (inclusive of VAT) received in the form of the allocated share of collected penalties, as provided for by legislation.

Effective 1 January 2026, a new fully automated real-time VAT invoice analysis system has been launched, utilizing AI to assign a risk level (low, medium, or high) to each VAT invoice. Input VAT claimed on VAT invoices classified as high risk will be recoverable by the purchaser only after the VAT has been fully paid to the state budget by the supplier or by the purchaser acting as a tax agent.

If the system assigns a VAT invoice a “high‑risk” status, the purchaser will have two options:

• to act as a tax agent by remitting the VAT relating to the relevant transaction directly to the state budget, and subsequently claim full recovery of such VAT, even if the VAT invoice is classified as high‑risk; or
• to pay the gross amount, including VAT, to the supplier and wait until the supplier remits the VAT to the budget. Until such VAT is paid, the corresponding amount will not be eligible for VAT offset.

The amount of VAT indicated in a VAT invoice classified as high‑risk will not be eligible for offset by purchasers of goods or services under such VAT invoices, except in the cases outlined above.

VAT Incentives:

A zero VAT rate is cancelled for the sale of services rendered directly at airports of the RUz and within the airspace of the RUz in connection with the servicing of aircraft on domestic flights, including air navigation services.

The VAT exemption for the sale of jewelry is cancelled.

A zero VAT rate is introduced for the supply of agricultural products (excluding cotton and grain) grown by agricultural producers, provided such products are included in the list of agricultural products approved by the Ministry of Agriculture and the Tax Committee of the RUz.

An accelerated VAT refund procedure for the full amount of VAT applies to the following categories of VAT payers:

• agricultural producers (excluding cotton and grain) — within three days;
• subjects of entrepreneurial activities that have transitioned from the small business category to the medium or large category, or from the medium business category to the large category — for one year from the date of transition to the respective category. This procedure applies once only during the lifetime of the subject of entrepreneurial activities and does not apply to any successor(s) of an entity that has been reorganized after transitioning to the relevant category.

Excise Tax:

Effective 1 February 2026, excise tax rates on tobacco products increase by approximately 7%, except for filtered cigarettes, unfiltered cigarettes, paper cigarettes, cigarillos (cigarettes), bidis, and kreteks, for which a similar increase in excise tax rates is scheduled to take effect from 1 July 2026.

Effective 1 April 2026, excise tax rates on petroleum products increase by approximately 7%. This applies in particular to gasoline, aviation kerosene, diesel fuel, ECO diesel fuel, and motor oils for diesel or carburetor (injection) engines, as well as to gasoline, diesel fuel, liquefied gas, and compressed gas sold to end consumers.

Effective 1 April 2026, a revised approach for calculating excise tax on the production of sugar containing beverages is introduced, based on the sugar concentration per 100 ml of product. Excise tax rates are set as follows:

• up to 5 grams — UZS 500 per liter;
• from 5 to 10 grams — UZS 515 per liter;
• 10 grams and above — UZS 535 per liter.

Where information on the sugar concentration of beverages is not indicated on the consumer packaging, the highest applicable excise tax rate shall apply.

Effective 1 April 2026, the excise tax rate on energy and tonic beverages increases by 7.5%.

Effective 1 April 2026, an excise tax of UZS 15,000 per 1 kg is introduced on products that are sliced into thin pieces or otherwise processed into thin form, fried or dried, and that contain potatoes or potato‑flavoring additives (i.e., chips), packaged in consumer packaging.

Effective 1 July 2026, the excise tax rates on the import and domestic production of certain types of alcoholic products is unified and set at the following levels:

• Vodka, cognac and other alcoholic products — UZS 48,000 per liter of absolute ethyl alcohol contained in the excisable product;
• Wine (natural wines of natural fermentation without the addition of ethyl alcohol) — UZS 10,000 per liter;
• Other wines, including vermouth — UZS 12,000 per liter;
• Beer — UZS 4,000 per liter.

Corporate Income Tax (CIT) and Turnover Tax:

The threshold of total income for monthly advance payments on CIT is increased from UZS 10 billion to UZS 20 billion.

Tax rates applicable to e-commerce entities are increased as follows:

• CIT — increased to 15% (from the previous 10%);
• turnover tax — increased to 4% (from the previous 3%).

A new mechanism is introduced under which the amount of tax withheld on a non-resident’s income sourced from RUz in the form of dividends paid by an Uzbek legal entity may be reduced by the amount of tax previously paid on dividends received by that legal entity from other Uzbek legal entities, subject to the following conditions:

• the non-resident holds at least a 25% ownership in the charter capital of the Uzbek legal entity paying the dividends;
• such ownership has been held continuously for at least 365 calendar days prior to the dividend payment date;
• the amount of tax paid on the dividends received has not previously been taken into account in determining the withholding tax on non-resident income in the form of dividends;
• the tax agent, being an Uzbek legal entity, has obtained documentary evidence confirming the payment of tax on dividends received from other Uzbek legal entities .

CIT Incentives:

CIT incentives granted by decisions of the President of the RUz are now limited to the right to apply accelerated depreciation in respect of depreciable fixed assets, for a period of no more than three years. Until 1 January 2026, CIT incentives could be granted by decisions of the President of the RUz in the form of a reduction of the statutory tax rate, by up to 50% and for a period of no more than three years.  

For taxpayers granted resident status in a Special Economic Zone (SEZ) as of 1 April 2026, the CIT incentive is provided in the form of the right to apply accelerated depreciation of fixed assets for a period determined based on the amount of investments made. Until 1 April 2026, the CIT incentive for SEZ residents was provided in the form of a CIT exemption.

Payers of turnover tax that transition to CIT for the first time starting from 1 January 2026 are exempt from CIT (except for dividend and interest income) for one tax period following the year of transition. This regime does not apply to reorganized taxpayers.

At the same time, such taxpayers are entitled to determine the tax base using a simplified method, in the amount of 25% of total income.

Taxpayers granted CIT incentives under decisions of the President of the RUz are entitled to reduce their tax base through accelerated depreciation of the undepreciated (residual) value of depreciable fixed assets, down to an amount equal to the tax base. The total amount of depreciation charges accrued within statutory limits, the amount of accelerated depreciation and any investment deduction should not exceed the depreciable value of the fixed assets.

Any expenses incurred for the construction of social infrastructure networks (including electricity, gas and heat supply, water supply, sewerage and roads) using the taxpayer’s own funds are also recognized as depreciable assets. Such expenses are treated as justified, provided that the social infrastructure networks are transferred free of charge to the relevant utility provider and a relevant opinion is submitted to the tax authorities, issued by the Center of Complex Expertise of Projects and Import Contracts. 

PIT

The fixed-amount regime for the payment of PIT by individual entrepreneurs is cancelled.

Water Use Tax

Water Use tax rates applied to the volume of water used by power plants, public utility enterprises, manufacturers of non‑alcoholic beverages and alcoholic products (excluding beer and wine), as well as industrial enterprises, are indexed on average by 7%.

Water Use Tax Incentives

The water use tax has been added to the list of taxes for which incentives may not be granted by decisions of the President of the RUz. Until 1 January 2026, water use tax incentives could be granted by Presidential decisions solely in the form of a reduction of the statutory tax rate, by up to 50% and for a period of no more than three years.

Water use tax incentive does not apply to SEZ residents.

Property Tax and Land Tax

The base rates of property tax for legal entities, as well as the land tax rates for both legal entities and individuals, are indexed on average by 7%.

Property Tax and Land Tax Incentives

Property tax and land tax incentives applicable to legal entities are granted subject to the simultaneous fulfillment by taxpayers, in the current tax period, of the following conditions based on the results of the previous calendar year:

• the total income from the sale of goods (services) exceeds the amount of the property tax and/or land tax incentive utilized;
• monthly remuneration accrued to each employee is not less than two times the minimum wage (currently UZS 1.27 million per month), and the average annual number of employees is at least three.

In assessing compliance with the above conditions, the following are taken into account:

• adjusted tax returns filed by the taxpayer;
• the turnover from the sale of goods (services) for the last twelve months, where the statutory deadline for filing tax returns for the relevant tax period has not yet elapsed.

The above conditions do not apply to:

• legal entities with direct private foreign investment participation;
• participants of production sharing agreements;
• non-profit organizations and budget organizations;
• legal entities whose sole participants are public associations of persons with disabilities, provided that total number of individuals with disabilities account for at least 50% of the total workforce and the payroll attributable to persons with disabilities represents at least 50% of the total payroll;
•  legal entities that obtained SEZ resident status before 1 January 2026.

These provisions shall apply, based on the results of the subsequent tax period, to taxpayers newly established during a tax period, including with respect to any newly granted tax incentives, with the exception of reorganized legal entities.

Sector-Specific Tax Updates:

From 1 May 2025 through 1 January 2028, subjects of entrepreneurial activities engaged in the sale of fruit and vegetable products in modern packaging are subject to CIT and social tax at a rate of 1%, provided that all of the following conditions are met simultaneously:

• monthly remuneration accrued to each employee is not less than two times the minimum wage (currently UZS 1.27 million per month);
• the share of income derived from the sale of fruit and vegetable products in modern packaging represents at least 50% of total income for the reporting (tax) period. Such income share is determined based on a phytosanitary certificate issued by the relevant authorized state body and the customs cargo declaration.

From 1 July 2025 through 1 January 2030:

• legal entities whose income from producing content intended for children accounts for at least 80% of total annual income, as well as the Children’s Content Development Center, are exempt from CIT on income derived from the sale of such content and are subject to social tax at a rate of 1%;
• legal entities are entitled to deduct expenses related to the creation of content intended for children for CIT purposes.

From 1 September 2025 through 1 September 2028, cotton-textile clusters, as well as enterprises of the textile and garment/knitwear industries, are subject to social tax at a rate of 1%.

From 1 January 2026 through 1 January 2031, as part of projects for the establishment of medium Earth orbit and low Earth orbit satellite communication networks in the RUz through a central ground station:

• the import of equipment, software products, spare parts and components into the territory of the RUz is exempt from VAT;
• the turnover of satellite communication network operators from the provision of services through the satellite communication system is exempt from VAT;
• telecommunication facilities hosting central ground stations, terminals and other active satellite communication infrastructure equipment, as well as the land plots they occupy, are exempt from property tax and land tax applicable to legal entities;
• profits of satellite communication network operators derived from the provision of services through the established satellite communication system are exempt from CIT.

Effective 1 April 2026, payment organizations, payment system operators, marketplaces and microfinance organizations lose the tax and customs incentives previously available to residents of IT parks and technoparks. These incentives, including those previously applicable to residents of the Technological Park of Software Products and Information Technologies, the Cybernetics Innovation IT Park, and Inno Technopark LLC, cease to apply.

Measures Aimed at Reducing the Shadow Economy²:

Effective 1 January 2026:

• An on-site tax inspection is envisaged in cases where imported food products are not sold within nine months (or within three months in case of meat and fresh fruit and vegetable products) and the remaining inventory value of such products exceeds 500 times the base calculation amount (currently UZS 412,000).  
• Amendments are introduced providing that the tax base for immovable properties and construction materials is determined based on the market value of such goods.
• Restrictions are introduced on the activities of foreign legal entities engaged in the provision of electronic services and the sale of goods to individuals in the territory of the RUz, in cases where such entities are found to be operating without tax registration and fail to complete registration within 30 days after receiving a notification requiring such registration.
• Legal entities operating in the construction and trade sectors are required to maintain records of their charter capital and any changes thereto, including goods contributed as part of the charter capital (such as electronic VAT invoices, online cash register receipts, customs cargo declarations, notarized sale‑purchase agreements, and other supporting documentation). These transactions must be recorded in the tax authorities’ database within fifteen days of their execution via the taxpayer’s personal online account.
• The accelerated VAT refund mechanism without audits shall not apply to subjects of entrepreneurial activities whose founder or management has committed a tax/duty evasion crime, nor to subjects of entrepreneurial activities newly established or reorganized by such founders or management within the last 12 months.
• The tax authorities are required to consider any additional documents submitted by taxpayers during a desk tax inspection to substantiate identified discrepancies. Officials of legal entities are exempt from criminal or other liability provided for by law, where the taxpayer remedies the identified violations within the prescribed time limits and fully pays the outstanding taxes and charges, including penalties.
• It is permitted to issue a VAT invoice upon the sale of goods by a seller engaged in licensed activities, activities requiring permissive documentation, or activities carried out under a notification procedure, following an automated verification confirming that the seller holds the relevant license, permissive document, or notification.

How EY Can Help?

We would be pleased to provide our support in the following areas:

• Delivering advisory services on the applicability of the new legislative requirements to your organization;
• Assessing the implications of these legislative amendments for your existing business structures, including the taxation of both current and planned transactions;
• Reviewing and updating your company’s tax accounting policy to reflect the recent legislative changes;
• Preparing formal inquiries to the relevant regulatory authorities regarding the application of the new legislative provisions that may require clarification.

We trust that this information will be useful to you. Our team remains at your disposal to discuss these developments in greater detail and to address any questions you may have.