VAT rate in Uzbekistan: 12% and when 0% applies

VAT rates: 12% and 0%

Article 258 knows no rates other than 12% and 0%. The zero rate is not an exemption: the supply is taxed at 0%, input VAT on goods and services used for such supplies is credited, and if the amount payable turns out negative, it is refunded under Article 274.

• 12% — supplies of goods and services whose place of supply is Uzbekistan, and imports of goods (Article 258)
• 0% — goods exported under the customs export procedure (Article 260)
• 0% — processing services for goods placed under the customs processing regime, provided the processed products are exported (Article 262)
• 0% — international transport of cargo, passengers, mail and baggage, and freight forwarding services in organising international transport (Article 263)
• 0% — precious metals sold by the producer to the authorised body (Article 264)
• 0% from 1 January 2026 — own-grown agricultural products from the approved list, except cotton and grain (Article 264)
• 0% through a refund of tax paid — purchases by diplomatic missions and parties to production sharing agreements (Article 264)

How the rate changed: 20% → 15% → 12%

The rate was reduced in 2019 and in 2023. When auditing or recalculating prior periods, tax is calculated at the rate in effect at the time of the supply: Article 4 of the Code links taxation to the legislation in force when the tax obligation arose.

• Until 1 October 2019 — 20%.
• From 1 October 2019 — 15%: the reduction was set by Presidential Decree No. UP-5837 of 26 September 2019.
• From 1 January 2020 — the same 15% in Article 258 of the Tax Code in its new version (Law No. ZRU-599).
• From 1 January 2023 — 12%: Law No. ZRU-812 of 30 December 2022 replaced the figure «15» with «12» in Article 258(1).

Who pays VAT

Taxpayers are listed in Article 237. All of them are registered with the tax authorities under a special VAT registration.

• legal entities of the Republic of Uzbekistan;
• individual entrepreneurs with income from sales exceeding UZS 1 billion in a calendar year, or who have switched to VAT voluntarily;
• foreign companies and foreign entrepreneurs, if the place of supply of their goods and services is Uzbekistan;
• foreign companies operating through a permanent establishment;
• the trustee of a simple partnership — for activities under the partnership agreement;
• persons moving goods across the customs border — under customs legislation.

Who does not pay VAT and when the obligation arises

VAT is not paid by persons who have switched to turnover tax, or by state authorities and administrative bodies within their assigned functions (Article 237). Turnover tax may be applied by legal entities with total income, and individual entrepreneurs with sales income, of up to UZS 1 billion a year (Article 461).

The threshold is tested during the year, not at year-end: if total income exceeds UZS 1 billion, the company or entrepreneur switches to VAT and corporate profit tax from the day that amount is reached (Article 462). VAT is charged from that date, so revenue should be tracked on a cumulative basis.

How to calculate VAT: formulas and an example

VAT payable for the month = VAT charged on sales minus VAT on goods and services received that is eligible for credit (Articles 265, 266, 272). A credit requires a tax invoice showing the tax separately, issued by a supplier registered as a VAT payer; for imports and VAT paid on behalf of a non-resident — proof that the tax was paid to the budget.

• Adding VAT on top: amount excluding VAT × 12%. For example, UZS 50,000,000 × 12% = UZS 6,000,000.
• Extracting VAT from an amount: amount including VAT × 12 / 112. UZS 1,120,000 contains UZS 120,000 of VAT; excluding tax — UZS 1,000,000.
• Example for a month: sales of UZS 100,000,000 + VAT of UZS 12,000,000; purchases of UZS 70,000,000 + VAT of UZS 8,400,000. Payable: 12,000,000 − 8,400,000 = UZS 3,600,000 no later than the 20th of the following month.
• If the creditable tax exceeds the tax charged, the amount payable is negative — the taxpayer may claim it back under Article 274.

VAT on imports of goods

The VAT base on import is the customs value plus excise tax and customs duty (Article 254). When goods are released for free circulation, tax is charged in full, while under transit, customs warehouse, re-export, duty-free trade and certain other regimes it is not paid (Article 277). Import VAT is paid in the manner and within the time limits set by customs legislation (Article 273) and, once paid, is credited (Article 266).

• Example: customs value of UZS 50,000,000, duty of UZS 5,000,000, non-excisable goods. The base is UZS 55,000,000; import VAT is UZS 6,600,000.
• Importers cannot apply turnover tax (Article 461): the company or entrepreneur switches to VAT and corporate profit tax from the date of the import contract or the import of goods, whichever comes first (Article 462).
• Imports exempt from VAT are listed in Article 246.

Services and goods of non-residents: the buyer pays the VAT

If a foreign person not registered as a VAT payer sells goods or services whose place of supply is Uzbekistan, the tax is calculated, withheld and remitted on its behalf by the buyer acting as tax agent (Article 255). Tax agents are Uzbek legal entities, individual entrepreneurs (subject to the exception in Article 255(4)) and permanent establishments of foreign companies — regardless of whether they pay VAT themselves. The rule does not apply to goods and services exempt from VAT under Articles 243–245.

For services, the general rule of Article 241 applies: the place of supply is Uzbekistan if the buyer carries on business or is located here. Special rules apply to services related to real estate, transport, advertising and electronic services.

• The contract price includes tax: out of UZS 112,000,000, the agent withholds UZS 12,000,000 of VAT and pays the non-resident UZS 100,000,000.
• The price is stated excluding tax: the agent calculates VAT on top of the price and remits it to the budget — 12% of UZS 100,000,000, i.e. UZS 12,000,000.
• The payment document confirming payment of the tax gives the right to credit it under the rules of Chapter 37 (Article 255).
• An agent that is not itself a VAT payer files a return no later than the 20th of the month following the month of payment (Article 273).
• Foreign companies providing electronic services to individuals are recognised as VAT payers for such services — under the rules of Chapter 39 (Article 278).

What is exempt from VAT

An exemption differs from the zero rate: no tax is charged, but input VAT on exempt supplies is not credited either. If a company has both taxable and exempt supplies, only the tax attributable to taxable supplies is credited — using the separate or proportional method of its choice (Article 268).

• childcare services in pre-school institutions and care services for the sick and elderly (Article 243);
• educational services, including organising tests and examinations (Article 243);
• financial services under Article 244 and insurance services under Article 245;
• imports of goods listed in Article 246;
• for licensed activities, the exemption applies only if a licence or permit is held (Article 243).

Deadlines and typical errors

• The tax period is a month; the return and payment are due no later than the 20th of the following month (Articles 259, 273).
• Zero rate without documents: supporting documents are filed together with the tax return (Article 260), and input VAT on exports is credited in proportion to the foreign currency proceeds received in accounts with banks in Uzbekistan (Article 266).
• VAT not calculated on a non-resident's services: the agent's obligation does not depend on whether the buyer pays VAT itself (Article 255).
• The UZS 1 billion threshold missed: VAT is charged from the day it is exceeded, not from the start of the following year (Article 462).
• A credit based on a tax invoice from a supplier not registered as a VAT payer is not allowed (Article 266).
• Penalty interest of 1/300 of the Central Bank refinancing rate accrues for each calendar day of late payment (Article 110).