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Uzbekistan Tax Changes for 2022 Include Increased Depreciation Rates, Removal of Loss Carry Forward Restrictions, and Several Others — Orbitax Tax News & Alerts

The State Tax Committee of Uzbekistan issued a series of releases summarizing changes to the tax code for 2022 ( Part 1, Part 2, Part 3, Overview). Changes include:

  • General deprecation rates are increased overall:
    • Buildings - 5%
    • Constructions (structures) - 10%
    • Pipelines, power lines, and telecommunications - 15%
    • Machinery and equipment (except transport equipment) - 20%
    • Transport equipment - aircraft and related equipment, ships, boats, locomotives - 10%
    • Transport equipment - motor vehicles, car bodies, trailers and semi-trailers, other transport equipment - 20%
    • Computers and peripheral equipment - 40%
    • Depreciable assets not otherwise classified - 15%
  • One-off depreciation allowances (premiums) for investment are increased:
    • for new technological equipment - 20%
    • for new construction with the aim of expanding production - 10%
  • The 10-year limit and 60% offset restriction for the carry forward of losses is repealed, meaning carry forward is allowed indefinitely with 100% offset;
  • Procedures are introduced for the payment of tax at the rate of 10% on the net profit after tax of a non-resident's permanent establishment (equated to dividends);
  • The standard property tax rate for legal entities is reduced from 2% to 1.5%, with the rate reduced from 4% to 3% for unfinished property within the standard construction period;
  • An exemption from property tax is introduced for legal entities for new oil and gas wells in the first 2 years, starting from the month they are put into operation, after which a 50% rate reduction is provided for 3 years;
  • The subsoil use tax is amended with new groupings (categories) and a reduction in the different rates overall;
  • A new special rental tax on mineral extraction is introduced on mining operations where the production of metals and hydrocarbons begins after 1 January 2022; and
  • The tax authority is granted the right to adjust the tax base for income tax and VAT purposes where transaction prices are below the market value of goods or services.

Click the following link for a letter from the State Tax Committee providing a more detailed overview of the changes.