Accounting Services Under the Simplified Regime: Turnover Tax Accounting

The "simplified regime" in Uzbekistan is the turnover tax

• it is applied by legal entities and individual entrepreneurs (IEs) with total annual income of no more than UZS 1 billion (Art. 461 of the Tax Code);
• among those not entitled to apply it are legal entities, IEs and self-employed persons that import goods (Art. 461);
• the rate for IEs and self-employed persons is 1% (Art. 467);
• returns are filed monthly, with the annual return due by 15 February (Art. 470);
• once UZS 1 billion is exceeded, the business moves to VAT and profit tax.

How the accounting is kept

Transaction documents are processed regularly, transactions are recorded, the period is closed and the reporting is prepared in the prescribed forms.

Thresholds and conditions for applying the regime are revised from time to time; ask us for the current ones.

• source documents
• bank and cash
• payroll
• monitoring of regime conditions
• reporting

What is most often missed

Keeping track of the conditions for applying the regime as turnover grows and new types of activity appear.

Another common problem is an incomplete set of source documents, which makes expenses hard to substantiate.

When to recalculate the tax burden

When the structure of revenue, expenses or headcount changes, it makes sense to recalculate the taxation options.

The calculation is based on the company's data and shows the difference in concrete figures.

How accounting works under the simplified regime

The basis is complete recording of receipts through all channels and supporting expenses with documents. The simplification applies to settlements with the budget, not to the paperwork.

If there are employees, a payroll block is added, which in terms of workload often exceeds everything else combined.

• receipts to the account and in cash
• expense documents
• settlements with counterparties
• payroll and HR data
• preparation of reporting

What is most often overlooked

Typical omissions are receipts through additional channels, working without written contracts and paying business expenses from personal funds.

None of these interferes with day-to-day work until turnover has to be substantiated — for example, in a loan application or deal negotiations.

Monitoring the conditions of the regime

The business parameters that determine eligibility for the regime need to be tracked during the period. Discovering an excess after the fact means a retrospective recalculation.

Thresholds are revised from time to time, so the current conditions should be checked in advance.

When to reassess the burden

Reasons for a review include growing turnover, new lines of business, hiring employees and starting to work with foreign counterparties.

In such cases it is useful to compare the options before the business changes: once operations begin, the choice has usually already been made for you.

Differences for an IE and a company

For an entrepreneur the scope is minimal; a company adds equity, settlements with shareholders and an HR block. The regime has the same name, but the workload does not.

That is why the cost of service is assessed by the number of accounting areas and documents rather than by the regime.

How to hand over the accounting without losses

The handover requires account statements, contracts, expense documents, HR data and previously filed reports.

If some data is missing, the scope of restoration is assessed separately — otherwise old gaps simply carry over into new periods.

What remains with the client

Timely delivery of documents and decisions on business matters remain with the business. This is a small but irreplaceable part of the work.

We remind you of missing documents and warn you of upcoming obligations, but only the director can sign documents and make decisions.

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An audit firm with 13 years of practice and more than 220 engagements completed.

We keep accounts and review them from the standpoint of a subsequent inspection.