Employee Gifts and Benefits in Kind in Uzbekistan: Tax Rules

What counts as a material benefit

Under Article 376 of the Tax Code, income in the form of a material benefit includes, in particular:

• payment by a legal entity, in the employee's interest, for goods and services: education, kindergarten, utilities, housing, a place in a dormitory, vouchers for treatment and holidays, or reimbursement of their cost;
• the value of property given free of charge, including under a gift agreement, and of services provided;
• the negative difference when goods are sold to an employee below their value;
• travel benefits granted to employees under the law;
• an employee's debts written off by decision of the company;
• taxes the company paid on the employee's behalf without withholding them.

How income in kind is valued

The value of goods and services received from a legal entity is based on the purchase price or cost. If the goods are subject to VAT or excise, the corresponding amounts are included in the value (Article 376 of the Tax Code). Personal income tax is withheld at 12% for residents (Article 381).

Because a material benefit is not income in the form of remuneration for work under Article 371, social tax is not charged on it: the social tax base is payments under Article 371 (Article 404 of the Tax Code).

Gifts: the tax-free limit

Gifts in kind received by employees from their employer worth up to 2.11 times the minimum wage during the tax period are not subject to personal income tax (clause 10 of Article 378 of the Tax Code). The same limit applies to gifts and aid for non-working pensioners and former employees who have lost their ability to work, as well as members of the family of a deceased employee.

With the minimum wage at 1,360,000 soums (from 1 September 2026, Decree UP-115), this is 2.11 × 1,360,000 = 2,869,600 soums a year per person. Any value above the limit is subject to personal income tax. The limit applies to gifts in kind — a cash “gift” is taxed as a payment to the employee.

What is not treated as the employee's income

Article 369 of the Tax Code lists employer expenses for employees that are not treated as their income:

• transporting employees to and from work;
• milk, therapeutic and preventive meals and protective equipment for those working in adverse conditions — under the procedure set by law;
• special clothing, footwear and uniforms for official duties, and meals for certain categories of employees where provided for by law;
• festive events, ceremonies, entertainment expenses, travel passes for business trips and other expenses on working and rest conditions that are not the income of specific individuals;
• professional development and retraining of employees;
• payment of contract tuition for students under direct agreements with universities and colleges in Uzbekistan.

What is exempt from personal income tax

• the employer's payment for medical services for employees and their children — by bank transfer to the medical institution or by paying cash against its documents (clause 3 of Article 378);
• reimbursement of vouchers (other than tourist vouchers) for employees' children under sixteen and students under eighteen to children's camps and sanatoriums in Uzbekistan, as well as for persons with disabilities (clause 2 of Article 378);
• financial aid on the occasions listed in clause 10 of Article 377 — within 4.22 times the minimum wage (clause 1 of Article 378); see our page on bonuses and financial aid for details.

Profit tax

Expenses that are an employee's income in the form of a material benefit under Article 376 are not deductible (clause 3 of Article 317 of the Tax Code). The exception is tickets for employees and their close relatives to cultural, concert and entertainment events within 0.5% of revenue. The value of property transferred free of charge is also not deductible (clause 27 of Article 317).

Expenses that are not the employee's income under Article 369 (transport, workwear, training) remain ordinary expenses and are deductible if the conditions of Article 305 are met. So the wording in the order and contract — “staff transport” or “payment of travel for a specific employee” — changes the tax consequences.