The VAT Reduction to 12% in 2023 and Latest News in Uzbekistan

Reduction of VAT in Uzbekistan

The value-added tax was last decreased from 20% to 15% in October 2019 in Uzbekistan.

Shavkat Mirziyoyev, President of the Uzbekistan Republic announced a reduction in VAT to 12% in an open dialogue with entrepreneurs.

In 2021, the Uzbekistani President promised to continue the policy of easing the tax burden on businesses and further reduction of the VAT rate during an open dialogue with businessmen, according to the head of the state’s press service.  He stated: “We have to say frankly that someone proposed to postpone it for later, as the economy has not recovered after the pandemic and the situation in the global economy is not favorable. But I want to assure you that we will never deviate from the path of reforms and we shall have reduced the value-added tax rate to 12 % by January 1, 2023”.

The plans for the reduction of value-added tax to 12 % became known at the Congress of the Liberal Democratic Party of Uzbekistan. Shavkat Mirziyoyev put forward a number of measures to reduce the amount of taxes and the burden on them.

BRIEF NEWS

• The President of Uzbekistan signed Decree No.UP-218 dated September 9, 2022, on “Writing off Tax Debt Arising as a Result of the Application of an Effective Tax Mechanism”. The official publication of the document is awaited for a detailed review, as the press service of the STC (State Tax Committee) reported.

• The VAT rate will be 12% from January 1, 2023. A single-tax rate for turnover tax is to be introduced at 4% for micro businesses. At the same time, the current tax rates of 1% and 2% for remote areas and certain categories will remain. The income tax rate for small businesses with an annual turnover of more than 1 billion soums will be reduced twice. Small businesses moved to the category of medium-sized businesses will pay the income tax with a 50% reduction for 2 years.

• A new edition of resolution No.471 dated 22.08.2022 was approved by the CM of Uzbekistan on the procedure for providing an electronic fiscal check via an electronic payment organization and/or electronic commercial platforms (marketplaces) while making cash settlements with the population. The RCM of Uzbekistan explained the procedure for their inclusion in the State Register Marketplaces.

• The Resolution of CM No.471 dated August 22.08.2022, made Amendments to the Regulations on the forms of bills and invoices and the procedure for filling, submitting, and accepting them, and the application of ICPS (Identification Code for Products and Services) in tax administration.

• The Information Letter on the Support for Business Entities in the Process of Applying IFRS, published by the Ministry of Finance of Uzbekistan, includes a Standard Chart of Accounts for Cost Accounting and Financial Reports based on IFRS. Three new benefits granted to business entities in 2022, as well as 12 % NDFL rate for non-resident individuals, can now be reflected in the updated form of the NDFL and social tax calculation (code 11101_15).

• The Regulation on the procedure was approved for issuing an electronic digital signature by consular institutions of Uzbekistan abroad (appendix to the RCM No.413 dated 29.07.2022). Buxgalter.uz has defined the work of this procedure.