January 6, 2021
Changes in legislation for 2021
Innovations in tax policy
Tax rates for 2021 will be the same. It is envisaged to maintain the main tax rates for VAT (15%), income tax (15%, for certain categories – 20%), personal income tax (12%), corporate property tax (2%), land tax for agricultural land (0.95%), social tax (business entities – 12%, budgetary organizations – 25%) and turnover tax (base rate – 4%). However, changes have been made to the Tax Code of the Republic of Uzbekistan.
A number of licenses and certificates are canceled
From January 1, 2021, 70 out of 266 types of licenses and 35 out of 140permits will be canceled. More details can be found here.
Reduction of the shadow economy
According to the Decree of the President of the Republic of Uzbekistan dated October 30, 2020 No. UP-6098 “On organizational measures to reduce the shadow economy and improve the efficiency of tax authorities”:
until January 1, 2022, incomes of small businesses in the public catering sector received from individuals using bank cards and contactless payments are not included in the total income for the purpose of a mandatory transition to the payment of generally established taxes;
the turnover tax rate for persons engaged in real estate activities is reduced from 25% to 13%;
construction companies are allowed to urgently hire workers without concluding an agreement with the payment of wages in cash, the volume of which must not exceed 10% of the total payroll for the reporting period (excluding the amount of social tax).
Transparency of public procurement
On October 30, the President of Uzbekistan signed the Decree “On additional measures for further development of the competitive environment and reduce state participation in the economy” dated July 6, 2020 No. UP 6019.
According to this Decree, a new procedure has been introduced in accordance with which, from January 1, 2021, the executors of public procurement, as well as procurement of business entities and enterprises of strategic importance, must:
disclose information about their ultimate beneficiaries (beneficiaries) who have effective control through direct or indirect ownership of 25 and more percent of their shares (stakes) by posting relevant information on a special information portal for public procurement;
on an ongoing basis to post on their websites and a special information portal information on the status of fulfillment of obligations under contracts concluded as a result of tenders and competitive tenders, the procedure for selecting the best proposals, as well as direct negotiations.
Antitrust Compliance System
According to the Decree of the President of Uzbekistan “On additional measures for further development of the competitive environment and reduce state participation in the economy” dated July 6, 2020 No. UP 6019, the antimonopoly compliance system is being introduced in the following enterprises with state participation as an experiment:
“Thermal Power Plants”;
“National electrical networks of Uzbekistan”;
Cancellation of some customs duties
According to the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated November 09, 2020 No. RСM 700, the rates of customs payments:
the types of paid services provided by the state customs authorities will be expanded, and strictly established rates of customs duties will be determined;
some types of customs duties related to the issuance of permissive documents will be abolished and brought in line with international standards;
the rates of customs fees for the goodsclearance in the customs regimes “processing in the customs territory” and “processing outside the customs territory”will be reduced;
instead of administrative liability for failure to comply with the terms of transportation of goods under customs supervision, customs duty is introduced as a financial measure.