Investment Guide

Privileges and Preferences

Taxed profit for legal entities is reduced for the amount of:

- means addressed to expanding of major production in the form of a new construction, reconstruction of buildings and erections used for production needs and payment of credits received for these purposes with deduction of depreciations calculated in a corresponding tax period, but not more than thirty (30) percents of taxed profit;

- means addressed for modernization and technological reequipping of production, obtaining of new technologic equipment, payment of credits issued for the above purposes, compensation of the cost of a leased object with deduction of imposed depreciation in a corresponding tax period. Reduction of taxed base in carried out within five (5) years starting from a taxed period in which the above expenses were carried out and on technologic equipment from the moment of putting it into operation. In case of realization and gratis transfer of new technological equipment within three (3) years from the moment of its obtaining, this privilege is annulled with the rehabilitation of duties on payment of income tax for the whole period of application of the privilege.

Moreover, the enterprises - domestic manufactures who export the produced goods (works, services) for the foreign currency, except raw materials, independently of the origin of production, are granted with:

-50 % reduction in the income (profit) tax – if the company exports  not less than 30 % of total amount of sales of produced goods (works, services);

-30 % reduction in the income (profit) tax – if the company exports from 15 % up to 30 % of total amount of sales of produced goods (works, services);

From Value Added Tax (VAT) are exempted:

- turnover on realization of property realized in the order of privatization of public property;

- turnover on realization of goods (works, services) obtained by legal entities at the cost of loans (credits) provided by international and foreign representation financial organizations on contracts (agreements) signed with the Republic of Uzbekistan and received at the expense of grants;

- turnover on realization of property transferred as investment obligations in accordance with the contract between investor and authorized public agency on management of public property;

- provision of services on contract for financial lease (leasing), with regards to interest income of the tenant in life (leaser);

- import of the technological equipment, imported to the territory of the Republic of Uzbekistan along with the list approved in accordance with the with the legislation and spare parts under conditions if their delivery is envisaged by conditions of contracts for delivery of technological equipment. In case of realization and gratis transfer of imported technological equipment for export within three (3) years from the moment of its import, this privilege is annulled with the rehabilitation of duties on payment of value added tax for the whole period of application of the privilege;

- import of goods imported as investment obligations in accordance with the contract between investor and authorized public agency on management of public property;

- import of raw products, materials and half-finished products imported for use in domestic production by the enterprises with foreign investments, specialized on the manufacture of child footwear.

When estimating the property tax for legal entities, the tax base shall be reduced by the cost of:

- equipment obtained for 5-year credit from the moment of putting it into practice, but not more than the term established for the reimbursement of the credit;

- leased property for the period of lease contract duration;

- new technological equipment reinstalled for implementation for the period of five (5) years. In case of realization and gratis transfer of new technological equipment within three (3) years from the moment of its obtaining (import), this privilege is annulled with the rehabilitation of duties on payment of property tax for the whole period of application of the privilege;

Moreover, the enterprises - domestic manufactures who export the produced goods (works, services) for the foreign currency, except raw materials, independently of the origin of production, are granted with:

- 50% reduction in the property tax – if the company exports not less than 30% of total amount of sales of produced goods (works, services);

-30% reduction in the property tax – if the company exports from 15% up to 30% of total amount of sales of produced goods (works, services).

From property tax for legal entities are exempted:

- newly established undertakings within two years from the moment of registration. The mentioned incentive is not applied to the enterprises, created on the basis of manufacturing capacities and capital assets of the liquidated (re-organized) enterprises, their separated divisions, and legal entities created under the existing enterprises, in case if they are working on the rented equipment.

From the customs duties also are exempted:

- the property imported by foreign investors and enterprises with foreign investments in the Republic of Uzbekistan for own industrial needs;

- the goods imported by foreign legal entities, which made direct investments into economy of the Republic of Uzbekistan for a total sum of more than USD 50 million provided that the imported goods are goods of their own production;

- the goods, works and the services intended for work under the Production Sharing Agreement and imported into the Republic of Uzbekistan according to project documentation by the foreign investor or other entities, participating in performance of works under the Production Sharing Agreement, and also goods exported by the investor belonging to him/her according to the Production Sharing Agreement;

- technological equipment imported to the territory of the Republic of Uzbekistan along with the list approved in accordance with the with the legislation and spare parts under conditions if their delivery is envisaged by conditions of contracts for delivery of technological equipment. In case of realization and gratis transfer of imported technological equipment for export within three (3) years from the moment of its import, this privilege is annulled with the rehabilitation of duties on payment of value added tax for the whole period of application of the privilege.

 Enterprises attracting direct foreign investment and specializing in the production of radio electronic devices, computers' components, ready-made cotton fabric and woolen cloth, ready-made garments, knitwear, socks and stockings and textile, processing of leather, production of footwear and ready-made leather and haberdashery goods, production of silk cloth and ready-made  products made of silk, production of new kinds of building materials, industrial production of poultry meat and eggs, production of finished products undergone industrial processing produced from local raw materials (with  the exception of alcoholic and soft drinks and tobacco products), production of finished meat, milk products, cheese and animal oil, production of medicines, synthetic detergents, and household chemical goods are exempted from payment of profit tax, property  tax, tax imposed on improvement and development of social infrastructure, unified tax payment or unified  tax, imposed on microcompanies and small  enterprises deriving their income from  main line of their activity, as well as from mandatory deductions to the Republic Road Fund.