Uzbekistan has significantly reduced the tax burden and simplified administration for small businesses. Taking into account the wishes of entrepreneurs, the threshold for switching to VAT and income tax has been raised to nearly 5 billion soums. For trade, services, and public catering sectors, a simplified voluntary VAT regime at a rate of 6 percent has been introduced.

Kun.uz turned to tax consultants Murod Muhammadjonov and Umidbek Safarov to get answers to questions of interest to businesses.

Murod Muhammadjonov clarified that the decree sets the threshold at 12,000 times the base calculation value — that is 4 billion 944 million soums. The threshold for switching to VAT for all turnover tax payers has been raised to this amount.

For 2026, it should be noted that five months have already passed. If 5 billion is divided by 12 and multiplied by the remaining 7 months, the threshold for the current year could be about 2 billion 884 million soums. This is an assumption and requires clarification from the Tax Committee. Until official clarifications, entrepreneurs wishing to remain on the turnover tax should consider that in 2026 the threshold may not be 5 billion. The full 5 billion limit may possibly take effect from 2027.

Umidbek Safarov explained that the excess of the threshold is counted from the period in which the invoice that caused the excess was issued. From that moment, the entrepreneur becomes a VAT payer at a rate of 12 percent and income tax payer at a rate of 15 percent.

Murod Muhammadjonov warned about a common mistake: many mistakenly think that only the amount exceeding the threshold is subject to VAT. In fact, the entire turnover that led to the excess is subject to VAT. For example, if the threshold is 4.9 billion and the next invoice is for 600 million, all 600 million are subject to VAT.

Also important: switching to VAT does not mean an automatic transition to the 6 percent regime. The 6 percent regime is voluntary. The entrepreneur first automatically becomes a VAT payer at 12 percent, and only then can apply for the 6 percent regime. When approaching the threshold, it is recommended to first apply for the simplified VAT and then exceed the limit.

The full interview can be viewed in the video above.

Source: kun.uz