Who cannot apply turnover tax in 2026?

Under Art. 461 of the Tax Code the regime is closed to producers of excisable goods and mining companies, fuel sellers, retail alcohol outlets, markets and shopping complexes, auditors and tax consultants, non-profits, pharmacies and medical services, and from January 1, 2026 the jewelry business (Law ZRU-1108). Importers also had to pay VAT from January 1 to May 31, 2026, but Decree UP-100 of 26.05.2026 cancelled that rule: from June 1, 2026 importing goods by itself no longer disqualifies you from turnover tax below the 12,000 BCU threshold. Source: lex.uz, norma.uz. Valid as of 2026-10-06.

Can an importer use turnover tax?

Yes, from June 1, 2026. Presidential Decree UP-100 of 26.05.2026 abolished the mandatory VAT status for importers: a company, sole trader or self-employed person bringing in goods may stay on turnover tax while income is below 12,000 BCU. Import VAT is still paid at customs, but on turnover tax it cannot be credited and goes into the cost of goods. Source: lex.uz (UP-100), norma.uz. Valid as of 2026-10-06.

Can you switch to VAT voluntarily before reaching the threshold?

Yes. A business can register as a VAT payer voluntarily before reaching the 12,000 BCU threshold — useful if your clients are themselves on VAT and want to credit your tax. Procedure on soliq.uz. Valid as of 2026-06-15.

Turnover tax in Uzbekistan 2026: rates and VAT threshold

Q: What is the base turnover tax rate in Uzbekistan in 2026?

The base turnover tax rate is 4%. Reduced rates (1–2%) apply to certain activities and locations, and a 1% rate applies to sole traders and the self-employed with income up to 1bn sum. Source: Tax Code of Uzbekistan, soliq.uz. Valid as of 2026-06-15.

Q: What turnover tax rate applies to sole traders and the self-employed?

From January 1, 2026 a single 1% turnover tax rate applies to sole traders and the self-employed with annual income up to 1bn sum. Source: Tax Code of Uzbekistan, buxgalter.uz. Valid as of 2026-06-15.

Q: At what turnover must you move from turnover tax to VAT?

From June 1, 2026 the threshold for mandatory transition to the general regime (VAT and profit tax) was raised to 12,000 BCU — almost 5 billion sum. Below the threshold you may stay on turnover tax. Source: gazeta.uz, soliq.uz. Valid as of 2026-06-15.

Turnover tax in Uzbekistan 2026: rates of 1–4% by activity, 1% for sole traders, the new 12,000 BCU threshold (≈5bn sum) and the switch to VAT.

Last updated 2026-10-06

Elena Vasyukova

Partner, Accounting & Tax practice

DipIFR, CPA Uz, ACCA Affiliate · chief accountant, 15+ years in international companies

Last updated 2026-10-06 · 14 min read

✓ Facts verified against primary sources (lex.uz, soliq.uz)

Last updated 2026-10-06 · 14 min read · ✓ Facts verified against primary sources (lex.uz, soliq.uz)

↻ Updated: 2026-10-06

The base turnover tax rate in Uzbekistan in 2026 is 4% of revenue; regional retail pays 1–2%, and sole traders and the self-employed with income up to 1bn sum pay 1%. It is the simplest regime: a percentage of revenue, with no credits, no input VAT and no electronic invoices. In 2026 the regime became even more attractive: the threshold at which you must move to VAT rose nearly five-fold — to 12,000 BCU (≈5bn sum). Let's break down who turnover tax suits, what rates apply by activity, and when the switch to VAT kicks in.

Valid as of 2026-10-06

Turnover tax rates, the list of restrictions and the threshold for moving to the general regime are governed by the Tax Code of Uzbekistan and presidential decrees; the figures change periodically. Before making decisions, check the current version on lex.uz and soliq.uz.

What is turnover tax, in plain terms?

Turnover tax is a tax charged directly on a business's revenue (turnover) at a fixed rate. No "output minus input", no VAT tracking on every purchase, no mandatory electronic invoices for the sake of a credit. Earned 200 million sum in a quarter — multiply by your rate — pay. That simplicity makes it the default choice for a starting small business, shops, cafes, small service companies and almost every foreigner who has just opened a company in Uzbekistan.

It is important not to confuse turnover tax with profit tax and VAT. These are three different worlds: turnover tax is for those who stay "small"; VAT and profit tax (the general regime) are for those who outgrow the threshold or deliberately choose the general regime. While you are below the threshold, turnover tax replaces both profit tax and VAT.

Turnover tax vs VAT: the difference

Turnover tax

simple regime

A rate of 1–4% straight on revenue. No credits, no input VAT, no mandatory e-invoices for offset. Minimal reporting and accounting — ideal for a start and modest turnover.

VAT + profit tax

general regime

VAT of 12% (or a voluntary 6%) on value added plus profit tax. You need invoices, ledgers and input VAT credits. More complex, but it opens up work with large counterparties.

The core idea: on turnover tax you pay a percentage of all revenue but administer almost nothing. On VAT you pay only on value added (the difference between output and input tax) but must keep full records. Which is better depends on your margin, the share of costs that carry VAT, and who your clients are.

We'll calculate which regime is cheaper for your specific business

What are the turnover tax rates by activity in 2026?

The main beginner's misconception is that turnover tax is always "4%". In reality the rate is differentiated: it depends on the activity, the taxpayer's status and even on the locality where you operate. The base rate is 4%, but for a whole range of categories it is lower.

Category / activity	Rate
Base rate (most industries)	4%
Retail trade in cities with population of 100k+	4%
Retail trade in other settlements	2%
Retail trade in remote and mountainous areas	1%
Retail trade in tobacco products (everywhere)	4%
Sole traders and the self-employed with income up to 1bn sum	1%
Organizations involving people with disabilities and veterans (per list)	0%

The rate depends on geography

For retail trade the rate is tied directly to location: the smaller and more remote the settlement, the lower the percentage (4% → 2% → 1%). The state uses this to stimulate trade in small and mountainous areas. If your shop is in a village, don't pay the city rate by default — check your category.

A special note on sole traders and the self-employed: from January 1, 2026 a single turnover tax rate of 1% applies to them with annual income up to 1bn sum. This is one of the lowest tax regimes in the country — which is exactly why the sole-trader format is so popular with freelancers and small service providers. Additional rate-reduction benefits no longer apply to sole traders on 1%: the 1% is itself the preferential level.

Who turnover tax suits

A starting business

Just opened a company or registered as a sole trader, turnover is modest, no large VAT purchases — turnover tax means minimal red tape at the start.

High margin, few costs

If you have almost no costs carrying input VAT (services, consulting, rent), there is nothing to credit on VAT — a simple percentage of revenue is often cheaper.

Foreign founder

A non-resident just entering the Uzbek market finds it easier to start on the turnover regime and learn the rules without complex VAT accounting.

Regional retail and catering

Shops and cafes outside major cities get reduced rates (1–2%) — the regime is especially favorable for them.

Minimal accounting

No resources for full-cycle bookkeeping — turnover tax requires far less reporting and paperwork than VAT.

Below the 12,000 BCU threshold

While annual turnover is below almost 5bn sum, you may stay on the simple regime and avoid moving to VAT.

Who cannot use turnover tax

Not every business can choose the turnover regime. Article 461 of the Tax Code lists exactly who the turnover tax does not apply to: such companies are treated as VAT and profit tax payers regardless of income. The list changed twice in 2026, so always check the current version.

Who may not apply turnover tax (Art. 461 part 2 of the Tax Code)

Producers of excisable goods and mining companies; agricultural producers with 25 ha or more of irrigated land; sellers of petrol, diesel and gas; lottery operators; fixed retail outlets selling alcohol, including beer; markets and shopping complexes; audit firms and tax-consultant organisations; non-profit organisations, including budget-funded ones; sale of medicines and medical devices and medical services (from 1 April 2025, Law ZRU-1104); manufacturing and sale of jewelry (from 1 January 2026, Law ZRU-1108). Full text on lex.uz.

Imports and turnover tax: what changed in 2026

Importers went through an important twist in 2026 that is still often retold incorrectly. Law ZRU-1108 of 25 December 2025 added importers to the exclusion list from 1 January 2026: any company, sole trader or self-employed person bringing goods across the customs border became a VAT and profit tax payer from the very first shipment. But on 26 May 2026 the President signed Decree UP-100, and from 1 June 2026 the mandatory VAT status for importers was abolished. Importing goods no longer disqualifies you from the turnover regime by itself: an importer may pay turnover tax while aggregate income stays below 12,000 BCU.

1 January – 31 May 2026

ZRU-1108

Importers excluded from turnover tax. One imported batch meant mandatory VAT registration and profit tax regardless of turnover.

From 1 June 2026

UP-100

Imports no longer trigger VAT automatically. An importer stays on turnover tax up to the 12,000 BCU threshold, unless its activity falls under another item of Art. 461.

The practical takeaway for anyone bringing in goods (marketplaces, distribution, equipment): the question is no longer "allowed or not" but "which is cheaper". Import VAT is paid at customs in any case, whatever your regime. On turnover tax that customs VAT cannot be credited and goes into the cost of goods. On the general regime import VAT is creditable, but you add 12% VAT on sales and 15% profit tax on top. With large import volumes and thin margins the general regime often wins; with small batches and a high markup it is simpler to stay on 4%. If your company registered for VAT in January–May 2026 only because of imports, re-check your status after 1 June: the obligation may have disappeared. The seller-specific breakdown is in marketplace seller taxes.

Beyond industry restrictions, there is a general rule too: once annual turnover exceeds the threshold, the right to turnover tax is lost automatically — regardless of your wishes. More on the threshold next.

At what turnover must you move from turnover tax to VAT?

This is the headline news of the year for small business. From June 1, 2026 the threshold for the mandatory move to the general regime (VAT and profit tax) was raised from 1bn sum to 12,000 BCU — almost 5 billion sum. With the BCU at 414,200 sum in 2026, that is about 4.97bn sum. The threshold is now tied to the BCU and will be indexed automatically each year.

12,000 BCU

new VAT transition threshold

≈4.97bn

sum at the 2026 BCU (414,200 sum)

×5

how much the threshold grew

In practice this means many more companies can now comfortably operate on the simple turnover regime without moving to complex VAT. Previously many businesses artificially "split" to avoid exceeding 1bn — there is far less point in that now. The new ceiling of almost 5bn sum already covers a sizeable business.

Turnover below 12,000 BCU

turnover tax

You stay on the simple regime: a rate of 1–4% on revenue, minimal reporting, no VAT and no invoices for the sake of a credit.

Turnover above 12,000 BCU

VAT + profit

The move to the general regime is mandatory: you become a VAT payer (12% or a voluntary 6%) and a profit tax payer, and keep full records.

We'll check whether you're approaching the VAT transition threshold

How the switch to VAT works: step by step

1
Track your turnover
Compare your year-to-date turnover with the 12,000 BCU (≈5bn sum) threshold. Monitor it on a cumulative basis, not month by month.
2
Record the breach
As soon as cumulative income exceeds the threshold, the obligation to move to VAT and profit tax arises. Don't miss the breach date.
3
Register for VAT
Register as a VAT payer in the manner set out on soliq.uz. This is also where you choose the rate: the standard 12% or the voluntary 6% (for trade, catering and services).
4
Set up e-invoices and accounting
Enable electronic invoices and input/output VAT accounting — without valid e-invoices, credits are lost.

A separate point: you can switch to VAT voluntarily, without waiting for the threshold. This makes sense when your clients are themselves on VAT and want to credit your tax — otherwise it is not worthwhile for them to work with you. In that case VAT-payer status becomes a competitive advantage rather than a burden.

Pros and cons of turnover tax

Pros of the turnover regime

Simple calculation: a percentage of revenue, no credits or complex formulas.
Minimal reporting and paperwork — no full-cycle bookkeeping needed.
Low rates for sole traders (1%) and regional retail (1–2%).
A high 12,000 BCU threshold — you can stay "small" for a long time.

Cons and limits

The tax is paid on all revenue, even if your costs are huge.
You cannot credit input VAT.
VAT clients find it unattractive to work with you without invoices.
A number of activities may not use the regime (Art. 461 of the Tax Code).
Importers cannot credit the VAT paid at customs — it goes into the cost of goods.

A simple calculation example

Let's show the logic with numbers. Suppose you run a service company (LLC) in Tashkent on the base turnover tax rate.

Quarterly revenue was 300 million sum.
The base rate is 4%.
Turnover tax payable: 300 × 4% = 12 million sum. That's it.

Now compare with a sole-trader freelancer providing the same services at the 1% rate: on the same 300 million they would pay just 3 million sum. And a retail point in a mountainous area at the 1% rate — also 3 million. This is exactly why the choice of legal form and pinning down your exact rate directly affect the tax burden. On VAT the calculation would differ — there the share of costs carrying input tax matters, and with large VAT purchases the general regime is sometimes cheaper.

Common mistakes

Paying the base 4% where a reduced rate applies (regions, sole traders); failing to track the approach to the 12,000 BCU threshold and missing the mandatory move to VAT; trying to use turnover tax in prohibited activities (Art. 461: jewelry, medicines, medical services, retail alcohol, audit and others); continuing to pay VAT "because of imports" after June 1, 2026, when Decree UP-100 removed that requirement; taking figures from outdated articles (the threshold, rates and importer rules all changed in 2026). Verify the facts on lex.uz and soliq.uz — or let us handle the taxes.

Turnover tax in Uzbekistan 2026: the essentials

Turnover tax is charged on revenue at 1–4% with no credits and no mandatory e-invoices — it is the simplest regime.
The base rate is 4%; regional retail is 1–2%; sole traders and the self-employed up to 1bn sum pay 1%.
The regime is closed to the Art. 461 list: excisable goods and mining, fuel, retail alcohol, markets, audit and tax consultants, non-profits, medicines and medical services, and from 2026 jewelry.
Importers had to pay VAT from January 1 to May 31, 2026, but Decree UP-100 cancelled that from June 1, 2026: importing by itself no longer disqualifies you from turnover tax. Customs VAT is still not creditable on the turnover regime.
The mandatory VAT transition threshold was raised to 12,000 BCU (≈5bn sum) from June 1, 2026 and is indexed annually.
You can switch to VAT voluntarily too — if clients are on VAT and want to credit your tax.
Which is better, turnover or general regime, depends on margin, the share of VAT-bearing costs and your client mix; it is calculated per business.

Frequently asked questions

What is the base turnover tax rate in Uzbekistan in 2026?+

The base rate is 4%. Reduced rates of 1–2% apply to regional retail, and a 1% rate applies to sole traders and the self-employed with income up to 1bn sum.

What turnover tax rate applies to sole traders and the self-employed?+

From January 1, 2026 a single 1% rate applies to sole traders and the self-employed with annual income up to 1bn sum. It is one of the lowest regimes in the country.

At what turnover must I move from turnover tax to VAT?+

From June 1, 2026 the threshold for the mandatory move to VAT and profit tax was raised to 12,000 BCU — almost 5bn sum. Below the threshold you may stay on turnover tax.

Who cannot use turnover tax in 2026?+

The list is in Art. 461 of the Tax Code: producers of excisable goods and mining companies, fuel sellers, retail alcohol, markets and shopping complexes, auditors and tax consultants, non-profits, pharmacies and medical services, and from January 1, 2026 the jewelry business. Importers were removed from the list by Decree UP-100: from June 1, 2026 importing goods does not disqualify you from turnover tax.

How does turnover tax differ from VAT?+

Turnover tax is charged on revenue at 1–4% with no credits or invoices. VAT (12% or a voluntary 6%) is charged on value added and requires input VAT accounting and e-invoices.

Can I switch to VAT voluntarily?+

Yes, you can register as a VAT payer voluntarily even before reaching the 12,000 BCU threshold — useful if your clients are on VAT and want to credit your tax.

Does turnover tax replace profit tax?+

Yes. While you are below the threshold and on turnover tax, it replaces both profit tax and VAT. On moving to the general regime, both taxes appear.

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