Income tax benefit introduced in Uzbekistan

Uzbekistan's investment companies have announced the launch of a new tool for private investors — the individual investment account (IIA). A Freedom Broker specialist explained in detail how this tool works and how investors can obtain up to a 12 percent exemption from income tax.

Individual investment accounts are a widely used practice in both nearby and distant foreign countries, even in neighboring states. This is a special type of brokerage account developed to encourage private investors to be active, and its main advantage is a tax benefit in the form of a 12 percent exemption from personal income tax.

An IIA is not only a tool for increasing income but also an opportunity to develop a useful financial habit. By regularly transferring part of salary or other income to the account, investors can effectively save funds to achieve their personal goals — from major purchases to paying for children's education.

Freedom Broker specialists highlighted several important reasons that make the IIA attractive: 1. Increasing income thanks to tax benefits The investor boosts their investment profit by being exempt from income tax up to 12 percent.

This benefit is applied to sums up to 100 times the minimum monthly wage (MMW) per year, allowing savings of up to 15,252,000 soums annually. Tax incentives are based on the following regulatory documents: Tax Code of the Republic of Uzbekistan, Article 378, Clause 23; Law No. 387 dated June 3, 2015; Resolution No. 90 dated January 17, 2022.

2. Possibility to guarantee up to 39 percent return According to the Central Bank, while interest rates are falling and deposit profitability has dropped to 20.7 percent, bonds purchased through an IIA can guarantee up to 39 percent annual profitability for periods of up to one year.

IIA as a corporate tool IIA can also be an effective tool as part of a corporate social package. This is an opportunity for businesses to increase employee motivation and loyalty.

However, accountants may have questions about applying this tool. They can get the necessary instructions from exchange members (brokers).

Conditions for opening an IIA Main requirements: To open an account, it is enough to contact your broker for advice. A new impetus to the stock market The launch of the IIA opens a new page for private investment: this tool serves to increase capital and reduce the tax burden — especially during a period when the profitability of alternative tools is declining.

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