June 23, 2020
Review of Tourism Legislation in Uzbekistan (March – June 2020)
In this review we examine the legislation in the field of tourism. The following material is provided in chronological order, in particular:
- Decree of the President of the Republic of Uzbekistan dated 03.04.2020 No. UP-5978 “on Additional Measures to Support the Population, Economic Sectors and Business Entities during the Coronavirus Pandemic”;
- Decree of the President of the Republic of Uzbekistan dated 18.05.2020 No. UP-5995 “on Additional Measures to Ensure Compliance of Quality and Safety Indicators of Agricultural Products with International Standards”;
- Decree of the President of the Republic of Uzbekistan dated 28.05.2020 No. UP-6002 “on Urgent Measures to Support the Tourism Sector to Reduce the Negative Impact of the Coronavirus Pandemic”.
Since March 2020, there have been some changes in the legislation in the field of tourism. Namely, from April 1 to December 31, 2020, by Decree dated 03.04.2020 N-5978, it was established that:
- companies in the field of tourism, JSC “Uzbekistan Airways”, JSC “Uzbekistan Airports” and sue “center” Uzaeronavigation ” are exempt from paying land tax and property tax, as well as pay social tax at a reduced rate of 1%;
- VAT payers with a monthly turnover of no more than 1 billion Soums per month and applying electronic invoices have the right to calculate and pay VAT on a quarterly basis;
- the application of increased rates of property tax and land tax in relation to unused production areas and non-residential buildings is suspended.
Further, the Presidential Decree dated 18.05.2020 No. UP-5995 approved a plan of measures to create organic markets and restaurants (hereinafter – “green tourism facilities“) to further increase the attractiveness of agroecotourism, which includes:
- entering into the electronic online auction “E-IJRO AUKSION” of land plots optimal for creating green tourism objects;
- construction of green tourism facilities selected based on the results of competitions that combine national traditions in harmony with modernity;
- creation of conditions for implementation of certified organic farms, organic markets;
- establishing cooperation between producers of organic agricultural products and well-known hotels and restaurants in Tashkent, Kokand, Margilan, Shakhrisabz, Samarkand, Bukhara and Khiva;
- advertising organic markets and restaurants in the cities of Tashkent, Kokand, Margilan, Shakhrisabz, Samarkand, Bukhara and Khiva.
Moreover, there was issued the Presidential Decree dated 28.05.2020 No. UP-6002, according to which from June 1, 2020 domestic tourism with the tourism companies in the regions “green” and “yellow” categories is renewed. In addition, incoming tourism is resumed with the definition of the list of countries whose citizens are allowed to enter Uzbekistan.
It is established that for tour operators, travel agents, and accommodation facilities from June 1 to December 31, 2020:
- income tax rates are reduced by 50% of the established rates;
- the right to transfer losses based on the results of 2020 and 2021 is granted without limiting their size;
- during the period until January 1, 2021, the accrual and payment of tourist tax is suspended.
At the expense of off-budget Fund of support of tourist sphere of the State Committee of Uzbekistan on development of tourism introduces an additional support, namely:
- from June 1 to December 31, 2020 lump-sum allocation of a target interest-free loan for a period of 12 months according to the criteria established by the Republican Anti-crisis Commission;
- partial subsidizing of start-up projects and innovative business ideas in the field of tourism – in the total amount of 1.5 billion Soums;
- from June 1, 2020 to December 31, 2021, the allocation of grants for the development and promotion of new tourist products and routes to guides in the amount of 5 million Soums, tour operators – 10 million Soums.
In addition, this Decree provides for additional state support at the expense of the State Fund for business support by subsidizing:
- in the period from March 1 to June 1, 2020, interest expenses of tourism entities on previously issued loans for the construction of accommodation facilities;
- in the period from June 1, 2020 to January 1, 2022, the interest expenses of tourism entities on previously issued loans for the construction of accommodation facilities in the part exceeding the main rate of the Central Bank, but by no more than 10% points;
- interest expenses of tourism entities on loans issued to bring them into compliance with the new requirements of health and safety rules and standards (SanPins) in the part exceeding the main rate of the Central Bank, but not more than 10% points;
- in the period from June 1 to December 31, 2020, interest expenses on loans issued to tourism entities for replenishment of working capital in the amount of up to 1 billion Soums, in the part exceeding the main rate of the Central Bank, but not more than 10% points.
To date, the Central Bank’s main rate is 15 % in accordance with https://cbu.uz/ru/press_center/news/214496/?sphrase_id=7854
Support in the form of subsidizing placement funds in the amount of 10% of the cost of placement services from June 1, 2020 to December 31, 2021 is also provided.
Moreover, it is noteworthy that for every foreign tourist (except foreign tourists, who arrived with the use of reimbursable Charter flights in accordance with the Decree dated 13.08. 2019 No. UP-5781), since the resumption of tourism to the total number of arriving foreign tourists in 500 thousand people above mentioned Fund is the payment of premium subsidies to tour operators and travel agents – residents of the Republic of Uzbekistan in the amount of $ 15.
A partial subsidy of 30% of the cost of air and train tickets is provided to tour operators. In addition, until June 1, 2021, the Fund will reimburse the cost of hotels for repairs to obtain or increase their categories in the following amounts:
- 5 million Soums for each room in 3-star hotels;
- 10 million Soums for each room in 4-star hotels;
- 15 million Soums for each room in 5-star hotels.
In addition, the extension is provided from October 1, 2020 for a period of 18 to 24 months for the payment of principal on early loans issued by commercial banks for the construction of placement facilities.
This Decree also exempts legal entities from paying customs duties (except for customs clearance fees and VAT) for equipment imported to the territory of the Republic of Uzbekistan for disinfection works, contactless controlled (sensor) equipment for construction, as well as odorless disinfectants.
In addition to the above mentioned, it is planned to introduce a system of sanitary and epidemiological security for tourists named “Uzbekistan. GUARANTEED safe travel”, which will be introduced at the facilities that serve foreign tourists. In addition, a proposal to liberalize the visa regime for foreign citizens is being considered, which is provided for attracting people with significant capital and a high level of academic knowledge to permanent residence in the Republic of Uzbekistan.