Tax regime to become more favorable for small businesses

The Presidential Decree “On creating more favorable economic and administrative conditions for the growth of small business entities” (Decree No. UP-100 dated May 26, 2026) has been adopted, the press service of the Ministry of Justice reports.

According to the decree, starting June 1, 2026, the threshold for transitioning to the general taxation regime is set at 12,000 BCV.

From June 1, 2026:

For entrepreneurs providing hotel and catering services:

• cash payments will be permitted for the sale of alcohol and tobacco products;
• when purchasing alcoholic products, digital marking codes will be recognized as sold to the final consumer by these entities.

For public catering businesses:

• a simplified procedure will be introduced for hiring certain categories of employees through the labor authorities’ mobile application on the same day and for a fixed period, including wage payments;
• partial VAT refunds will amount to 40% of the paid VAT, regardless of the share of non-cash revenue.

Starting January 1, 2027:

• fees for retail alcohol sales and alcohol sales by catering establishments will be consolidated, with the rate set at 10% of BCV;
• minimum rental rates for tax purposes will not apply when individuals or legal entities lease properties exceeding 1,000 sq. m to entrepreneurs (except in Tashkent);
• small businesses will be allowed to deduct expenses for accounting services and tax consultants at double the standard deduction rate.

From June 1, 2026, to January 1, 2030, entrepreneurs operating primarily in catering, trade, or services may voluntarily choose the simplified VAT calculation and payment regime.

Under this regime:

• the VAT rate will be 6% of total turnover from goods and services;
• the corporate income tax rate will be 0%, and tax reporting requirements will be abolished;
• input VAT on purchased goods and services will not be creditable.

According to the decree:

• the VAT payer certificate will be issued solely for taxpayer registration purposes and will not serve as grounds for enforcement measures.

The following will be abolished:

• the procedure for temporary suspension of VAT payer certificates;
• mandatory recognition as VAT payers for legal entities, sole proprietors, and self-employed individuals importing goods across Uzbekistan’s customs border.

Starting January 1, 2027, VAT refund processing for low-risk taxpayers will be automated without human involvement.

Until January 1, 2028, small business entities will be allowed to independently correct tax violation indicators identified by the tax risk analysis system.

In such cases, no inspections will be conducted if:

• the tax risk amount is up to 500 million UZS — no tax audit;
• the tax risk amount is up to 100 million UZS — no field tax inspection.