Uzbekistan tax reforms 2026: new SME benefits and VAT rules

Starting 1 June 2026, significant changes for small businesses in Uzbekistan will come into effect under Presidential Decree No. PD-100 of 26 May 2026, “On Creating Even More Favorable Economic and Administrative Conditions for the Growth of Small Business Entities.” These reforms introduce a range of measures aimed at improving the business environment and supporting the sustainable growth of small enterprises.

Key changes

• The revenue threshold for transitioning to the standard tax regime has been increased to 12,000 Basic Calculation Units (BCUs), providing greater tax flexibility for small businesses
• Businesses in the retail, service, and food service sectors will be able to opt for a simplified VAT regime with a reduced six percen VAT rate, helping lower the tax burden and streamline tax compliance
• Importers will no longer automatically become VAT taxpayers, reducing administrative burdens and providing greater flexibility in tax planning and compliance
• Food service businesses will continue to benefit from additional VAT incentives, supporting growth, improving profitability, and reducing the overall tax burden on the hospitality sector
• Mechanisms for automatic VAT refunds are being expanded, enabling eligible businesses to receive VAT refunds faster and with fewer administrative procedures
• The digitalization of tax administration and compliance processes is reducing the administrative burden on businesses, making tax reporting more efficient and improving the overall ease of doing business

What does presidential Decree No. PD-100 provide for?

In a continued effort to liberalize the economy and create more favorable conditions for small business development, Presidential Decree No. PD-100 of 26 May 2026, has been adopted in the Republic of Uzbekistan. The reform is primarily aimed at reducing the administrative burden on businesses, creating new growth opportunities for small businesses, and improving the effectiveness of digital tax administration and tax compliance processes.

New threshold for the mandatory switch to the general tax system

One of the most significant reforms is the increase in the revenue threshold for the mandatory transition to the standard tax regime, allowing small businesses to continue operating under simplified taxation rules for a longer period.

Starting 1 June 2026, this threshold has been expanded until 12,000 Basic Calculation Units (BCUs). In Uzbekistan, based on the current BCU rate of UZS 412,000, this amount is equivalent to UZS 4,944,000,000. Please note that the BCU value is expected to increase from 1 September 2026, which will consequently raise the threshold amount expressed in Uzbek soums.
Previously, many small businesses were required to transition to a more complex taxation regime after reaching 1 billion turnover. The new provision allows entrepreneurs to remain under the simplified tax regime for a longer period, helping reduce accounting costs and easing the administrative burden associated with tax compliance and reporting.

Changes for importers

A key reform affects businesses that import goods into Uzbekistan. Under the new regulations, importing goods will no longer automatically trigger VAT taxpayer registration, providing importers with greater flexibility and reducing unnecessary administrative requirements.

Individuals, individual entrepreneurs, and legal entities may continue to operate under the turnover tax regime until their revenue reaches the established threshold of 12,000 Basic Calculation Units (BCUs).This change eliminates the previous requirement under which an import transaction automatically triggered VAT taxpayer registration. This means a lower administrative burden and more predictable tax planning.

New simplified six percent VAT regime

One of the key reforms introduced under presidential Decree No. PD-100 is a new simplified VAT regime designed to streamline VAT calculation and payment procedures for eligible businesses. The regime will be in effect from 1 June 2026, to 1 January 2030. The regime is available to small businesses whose primary business activity falls within one of the following categories:

• Food service and catering
• Retail and wholesale trade
• Service provision

Under this regime:

• The VAT rate is set at six percent of turnover from the sale of goods and services
• The corporate income tax rate is zero percent
• The requirement to submit certain types of tax reporting is eliminated

VAT credit rules under the simplified six percent VAT regime

Before opting for the new regime, businesses should carefully evaluate its specific requirements, benefits, and tax implications to ensure it aligns with their operational and financial objectives. Businesses operating under the six percent VAT regime are not entitled to claim input VAT credits on VAT paid to suppliers for goods, works, or services.

At the same time, customers of businesses operating under this regime retain the right to claim VAT credits based on electronic invoices received. Therefore, before opting for the new regime, businesses are advised to conduct a preliminary financial assessment and compare the overall tax burden under the simplified six percent VAT regime with that of the standard taxation system.

How to switch to the six percent VAT regime

Businesses can switch to the new regime electronically through their taxpayer personal account on my3.soliq.uz tax portal. The transition to the simplified regime, or withdrawal from it, takes effect on the first day of the month following the month in which the notification is submitted.
Upon returning to the standard taxation system, the taxpayer becomes eligible to claim VAT credits on the remaining, inventory and stock, fixed assets recorded on the balance sheet as of the transition date.

Incentives for food service and hospitality businesses

Starting 1 June 2026, a range of additional support measures will be introduced for food service businesses and hotels. In particular:

• Cash payments for the sale of alcoholic beverages and tobacco products are once again permitted
• Digital labeling codes for alcoholic beverages will be deemed sold to the end consumer at the time the respective products are purchased
• A simplified procedure for hiring certain categories of employees will be introduced through the labor authorities’ mobile application
• The wage payment process for such employees will also be simplified

In addition, for certain categories of businesses, charges for the use of adjacent land areas will be capped at a level equivalent to the standard land tax, helping reduce operating costs and improve business conditions.

VAT refunds and the digitalization of tax administration

The decree introduces further enhancements to automated VAT refund procedures, helping businesses receive VAT refunds more quickly while reducing administrative barriers and improving the efficiency of tax administration. Among the most important changes:

• the elimination of subjective human involvement in VAT refund decisions for low-risk taxpayers claiming negative VAT balances
• the introduction of automated risk assessment based on electronic invoices and tax reporting data
• the expansion of digital tax services

Reducing the administrative burden for businesses

The Decree removes several regulatory mechanisms that previously created significant operational and administrative challenges for businesses, helping improve the overall business environment and reduce compliance-related risks for entrepreneurs. In particular:

• the VAT taxpayer certificate will no longer be used as an enforcement tool
• the practice of temporarily suspending VAT taxpayer certificates will be abolished
• mandatory VAT registration solely on the basis of importing goods will be eliminated
• automated VAT refund procedures will continue to be expanded and enhanced

Together, these measures are designed to enhance business stability, and eliminate regulatory barriers, contributing to a more efficient and business-friendly environment for entrepreneurs and SMEs in Uzbekistan.

Automated desk tax audit (“Autocameral”) and tax inspections

Until 1 January 2028, small businesses will have the opportunity to voluntarily rectify discrepancies and violations identified by the automated tax monitoring system (“Autocameral”) before further enforcement measures are applied, helping reduce compliance risks and administrative pressure on businesses. At the same time, a tax audit will not be initiated if the identified tax risk amounts to less than UZS 500 million and, an on-site tax inspection will not be initiated if the identified tax risk amounts to less than UZS 100 million.
In essence, the government is moving away from a punitive approach to tax enforcement and toward a compliance-based model that emphasizes risk prevention, voluntary correction of tax discrepancies, and reduced administrative pressure on businesses.

Key takeaways for businesses

Presidential Decree No. 100 represents one of the most comprehensive tax administration reforms introduced in Uzbekistan in recent years, aimed at improving the business environment, reducing administrative burdens, and creating new opportunities for the growth of small and medium-sized enterprises (SMEs). The most important changes for businesses include:

• An increase in the threshold for transitioning to the standard tax regime to 12,000 Basic Calculation Units (BCUs)
• The option to apply a voluntary six percent VAT regime
• The elimination of automatic VAT registration for importers
• The simplification of VAT refund procedures
• A reduction in the administrative burden on entrepreneurs
• The further development of digital and risk-based tax administration and compliance monitoring

For small businesses in the retail, services, hospitality, and food service sectors, these reforms may lead to substantial cost savings, simplified tax compliance, and more favorable conditions for sustainable growth and business expansion in Uzbekistan.