Subsoil Use Tax: Taxpayers, Base and Rates

Who pays

Taxpayers are legal entities and individuals that extract (recover) minerals (Art. 449). Individuals engaged in artisanal mining of precious metals in compliance with legal conditions are not taxpayers in respect of that activity.

For producers of precious, non-ferrous and radioactive metals, rare and rare-earth elements and hydrocarbons, the Code also provides a special rent tax on mineral extraction (Section XVIII¹, Art. 454¹ onwards). This is a separate tax on rent income; it does not replace the subsoil use tax.

Object of taxation

The object is the volume of mineral extracted (recovered), and for ferrous, precious, non-ferrous and radioactive metals and rare and rare-earth elements — the volume actually sold (Art. 450). The object is determined separately for each type of mineral.

The extracted volume is calculated net of technological losses within norms approved by the authorized body or, where there are none, by the taxpayer. Technological losses include, in particular, recovery losses (other than above-norm losses), losses in primary field processing of hydrocarbons, and gas reinjected into the reservoir to maintain pressure.

• common minerals extracted within the taxpayer's own land plot and used for its own household needs are not taxed;
• non-metallic minerals extracted when clearing riverbeds and reinforcing banks are not taxed — except for the volume sold.

Tax base

The base is the value of the volume extracted, and for metals and rare elements — the value of the volume actually sold (Art. 451). It is determined cumulatively from the start of the period at the weighted average selling price, calculated by dividing sales revenue (excluding VAT and excise) by the physical volume sold.

If part of the mineral is used for own needs, the base is calculated at the weighted average price for the entire extracted volume. If there were no sales in the period, the price of the last period with sales is used. If there have been no sales since extraction began, or if all of the mineral is used for own needs, the base is production cost plus 20%; after the first sale the tax is adjusted.

When gas, oil and condensate are processed in-house or on a tolling basis, the base is the selling price of the processed products less the costs of further processing and transportation. Special rules in Art. 451¹ apply to gold, silver, platinum, palladium, copper, zinc, lead and molybdenum: the price is the higher of the arithmetic average exchange price (based on LBMA and LME data) and the weighted average selling price.

Rates from 1 January 2026

Rates are set as a percentage of the base and, for certain non-metallic materials, with a minimum amount in soums per cubic meter or ton (Art. 452 as amended by Law ZRU-1108). Selected items from the table:

• oil, natural gas, gas condensate — 10%;
• coal, oil shale — 4%;
• gold, silver, palladium, platinum and other precious metals — 7%;
• copper, lead, zinc, molybdenum, nickel and several other non-ferrous metals — 7%, other non-ferrous metals — 10%;
• uranium, thorium, radium — 8%; tungsten — 2.7%;
• iron — 2%;
• marble — 5%, but not less than 21,400 soums per cubic meter; granite — 5%, but not less than 32,100 soums per cubic meter;
• minerals recovered from technogenic mineral formations — 50% of the rate for extracting the main mineral.

Local coefficients and increased rates

District and city Councils of People's Deputies may set an increasing coefficient of up to 1.3 for fixed rates on non-metallic construction materials (except limestone for cement production). So for quarries of such materials, the decision of the local Council at the place of extraction must be checked.

For enterprises with a predominant state share that extract hydrocarbons and metals, the President may set increased rates (Art. 452).

Periods, reporting and payment

For legal entities the tax period is a quarter and the reporting period a month; for individuals both are the calendar year (Art. 453). The taxpayer calculates the tax itself from the base and rate (Art. 454).

Legal entities file cumulative returns monthly no later than the 20th of the month following the reporting period and pay the tax by the same date. Individuals file once a year no later than 1 February of the following year. Returns are filed at the place of tax registration, and for non-metallic construction materials — at the place of extraction.

What to check in an audit

• approved norms of technological losses and their match with actual data;
• the weighted average price calculated separately for each mineral and cumulatively;
• volumes used for own needs — whether they are included in the base;
• adjustment of the tax after the first sale if the base was previously cost plus 20%;
• the place of filing for non-metallic materials and the local increasing coefficient.