VAT Rate on Exports: 0% and How to Support It

What is taxed at the zero rate

Article 260 of the Tax Code applies the 0% rate to sales of the following (special cases of the zero rate are in Article 264):

• goods removed under the export customs procedure
• goods removed after the customs procedure of processing within the customs territory, and the products of their processing
• supplies: fuel and lubricants for operating aircraft
• services for transporting goods in customs transit from the customs office of arrival to the customs office of departure
• services directly related to international transport (listed in Article 263)

Which documents confirm the export of goods

Documents confirming the right to the zero rate are submitted together with the tax return (Article 260). Article 261 names three main documents:

• the contract or a copy certified in the prescribed manner
• the cargo customs declaration for export; for goods sold through domestic and foreign e-commerce platforms, the documents on the basis of which they were exported
• shipping documents bearing the stamp of the customs authority at the border crossing point, confirming that the vehicle carrying the goods crossed the border

Electronic confirmation and export through a commission agent

From 1 January 2025, information on border crossing that customs transmits to the tax authorities electronically in real time also serves as a basis for confirming export; the rule applies to exports made from 1 December 2023. Under the Regulation on the procedure for VAT refunds (Cabinet of Ministers Resolution No. 489), in this case there is no need to submit export confirmation documents to the tax authority.

When exporting through a commission agent or attorney, the principal additionally submits the commission (agency) agreement. Depending on the type of activity, other documents may also be required; their list is approved by the Cabinet of Ministers.

When to record the export and when to report

The date of an export supply is not shipment from the warehouse but the actual crossing of the customs border (Article 242). Example: goods were shipped on 28 September and crossed the border checkpoint on 2 October, so the supply belongs to October and goes into the return due no later than 20 November. Deadlines:

• date of supply: the date of actual crossing of the customs border; for periodic or temporary declaration, the date of registration of the cargo customs declaration with customs stamps (Article 242)
• VAT tax period: one month (Article 259)
• VAT return: no later than the 20th day of the month following the reporting month (Article 273)

The exporter's input VAT: conditions for offset

The zero rate differs from an exemption in that VAT on goods and services used for taxable supplies, including zero-rated ones, is offset. For purchases used for VAT-exempt supplies, no offset is allowed (Article 267). The key offset conditions for an exporter under Article 266, which must all be met at the same time:

• use of the goods (services) in taxable activities, including export
• an invoice showing the VAT amount from a supplier registered as a VAT payer
• for exports of goods, a bank statement confirming payment by the foreign buyer

Offset in proportion to foreign currency proceeds: an example

VAT on purchases for zero-rated exports is offset in proportion to the foreign currency proceeds received in accounts with banks in Uzbekistan (Article 266).

Example (illustrative figures): export shipment of 2,000,000,000 soums, proceeds received of 1,500,000,000 soums (75%), input VAT on purchases for this shipment of 180,000,000 soums. In the current period, 75% is offset, i.e. 135,000,000 soums; the remaining 45,000,000 soums is offset in proportion to the proceeds received later.

The exception is disciplined taxpayers who receive their foreign currency proceeds on time and have no overdue receivables under export contracts: they offset VAT regardless of whether proceeds have been received. But if the proceeds are not received within 180 calendar days from the date the goods were released under the export procedure, the offset is reversed for the corresponding portion.

Export of services: 0% or outside the scope of VAT

For services, the zero rate applies only in the cases expressly named in Chapter 36 of the Tax Code: international transport and related services, transit, processing of goods with export of the processed products (Articles 260–263), as well as the special cases in Article 264, such as services to diplomatic missions, where 0% is applied through a refund of the tax paid. Other services to foreign customers, such as consulting or software development, are not subject to VAT in Uzbekistan if their place of supply is not deemed to be the territory of Uzbekistan: as a general rule, it is determined by the buyer's place of business (Article 241).

The right to offset input VAT is retained: supplies of such services are treated as taxable (Article 266). For a refund, the provision of the service is confirmed by the contract and a bank statement showing payment by the foreign buyer, and for electronic services by a report in line with generally accepted foreign practice and a bank statement (Regulation on VAT refunds, paragraphs 11–12).

Refund of the excess and typical mistakes

If input VAT exceeds output VAT, the negative amount is offset against future VAT payments or, on application in the tax return, refunded (Articles 272 and 274). A desk audit of a refund takes up to 30 days, and the amount must be refunded no later than 30 days from the date of notification; exporters that have previously received VAT refunds without any violations found have the amount arising from the zero rate refunded on application under an accelerated procedure, within 7 days (Articles 138 and 274). Mistakes that prevent the rate and the offset from being supported:

• the export was recorded at the date of shipment from the warehouse rather than the date of border crossing, and the supply fell into the wrong month
• the description, quantity or value of the goods in the contract, the customs declaration and the shipping documents do not match
• input VAT was offset in full although the proceeds were received only in part
• purchases under invoices classified as high-risk: from 2026 the buyer does not offset VAT on them until the tax is paid through the tax agent mechanism (Articles 266-1 and 267)
• invoices were not issued through the electronic invoice information system, which is grounds for refusing a refund (Regulation on VAT refunds, paragraph 25)
• services to foreign customers were taxed at 12%, although the place of supply is not Uzbekistan