Another revolutionary step has been taken in our country to support entrepreneurial activity, expand freedom for business representatives, and significantly alleviate their administrative burdens. A historic decree of the President of the Republic of Uzbekistan, "On Creating Further Favorable Economic and Administrative Conditions for the Growth of Small Business Entities," has been announced.
With this important document, many conveniences and reliefs that entrepreneurs have been waiting for years are being implemented in the tax system. We have gathered the most pleasant and important details about what reliefs the new decree brings to the business world and how it will create fundamental changes in their activities for you, our dear readers, in simple, accessible language.
VAT threshold increased to nearly 5 billion UZS
One of the biggest pieces of good news for small business representatives is the sharp increase in the mandatory transition criteria for the general tax system (VAT). Starting from June 1, 2026, this threshold amount is set at 12,000 times the base calculation amount (BHM). To put it more seriously, this figure currently means 4 billion 944 million UZS! For comparison, this threshold has been only 1 billion UZS since the beginning of 2020. Now, entrepreneurs can calmly operate under a simplified system until their annual turnover reaches 5 billion UZS.
6% VAT for catering, trade, and services
According to the new decree, from June 1, 2026, to January 1, 2030, entrepreneurs working in the catering, trade, and service sectors (excluding enterprises with state shares and large taxpayers) are granted the right to voluntarily choose a highly simplified procedure for paying VAT.
The attractive aspects of this new system are as follows:
VAT rate
for the turnover of all types of products and services is set at only 6 percent. Most joyfully, for entrepreneurs who choose this procedure, the profit tax rate is set at 0 percent
and they are completely exempted from the obligation to submit tax reports. The right to offset VAT on purchased goods is not granted, and existing benefits and the procedure for returning negative differences are not applied. However, buyers who purchase products from these entrepreneurs retain the full right to offset the VAT amount.
Note:
Switching to or opting out of this system is at the entrepreneur's discretion and takes effect from the first day of the month following the month in which the notification is sent to the tax office. The Tax Committee will establish a system for calculating 6% VAT on electronic receipts and invoices within one month.
Fast and fair tax administration: Human factor is limited Within the framework of new reforms, a number of administrative barriers that have been troubling entrepreneurs have been shattered. First of all, the unpleasant procedure of temporarily suspending a taxpayer's certificate has been completely abolished. Also, the practice of forcibly recognizing companies engaged in imports, individual entrepreneurs, and self-employed persons as VAT payers has been put to an end.
Furthermore, starting from January 1, 2027, the old system involving the human factor in covering the negative difference in VAT (refunding money from the state) for entrepreneurs with low tax risk will be abandoned, and the process will be carried out fully automatically. Negative difference amounts up to 10 million UZS generated before the decree takes effect will be automatically returned to the entrepreneur's bank account without any applications or tax audits.
Restriction on inspections: Administrative pressure decreases
New opportunities have been created for entrepreneurs to correct their mistakes independently. Until January 1, 2028, if an entrepreneur voluntarily corrects errors identified through a special automatic program, the following tax audits will not be conducted:
Tax risk amount
Type of audit not conducted
Up to 500 million UZS | Tax audit is not allowed |
Up to 100 million UZS | Field tax audit is not conducted |
Moreover, starting from July 1, 2026, as soon as a response to a desk audit request or a correction is made, the process of reactivating the entrepreneur's bank account will be performed fully automatically, without human intervention. From 2027, it will be permitted to deduct expenses for involving accountants and tax consultants in a double amount. | Great reliefs for cafes, restaurants, and hotels |
There is also very pleasant news for representatives of this sector. From June 1, 2026, it is officially permitted to accept cash payments when selling alcohol and tobacco products in hotels and restaurants. When drinks are purchased, digital marking codes are considered to be released for final consumption at these locations themselves.
Also, a system is being introduced for catering outlets to hire certain employees for a specific period through a special mobile application and pay salaries in a simplified manner. Most joyfully,
40 percent
of the VAT amount they paid (regardless of the share of non-cash receipts) will be returned by the state. From 2027, fees for the right to sell alcohol will be consolidated and set as a single rate at 10% of the BHM. Conveniences in rental payments According to the decree, the rent amount paid for using areas adjacent to buildings in the restaurant, trade, and service sectors is set at only one time the land tax. From 2027 (excluding Tashkent city), when properties with a total area of more than 1,000 square meters are rented out to entrepreneurs, minimum rental rates for tax purposes will no longer apply.
The rules of this historic and long-awaited decree took effect immediately from the moment of announcement. Continue to follow the new opportunities opening up for the development of entrepreneurship in our country and the most important economic news with us, dear readers!
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