VAT or simplified tax in Uzbekistan 2026: which to choose

Yaroslav Kolesov

Partner, Accounting & Tax practice

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

Last updated 2026-06-16 · 12 min read

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

Last updated 2026-06-16 · 12 min read · ✓ Facts verified against primary sources (lex.uz, soliq.uz)

Whether the simplified tax or VAT is better depends on turnover, margin and the share of input VAT: turnover tax at 4% is usually cheaper for small business with a high margin and small purchases, while standard 12% VAT wins when you have a lot of creditable input VAT or your clients are themselves on VAT. In 2026 business effectively has three regimes: from June 1 a simplified VAT at 6% appeared, and the threshold for mandatory VAT rose to nearly 5 billion sum. Let's break down each one, compare them in a table, and calculate the tax burden on concrete numbers.

What tax regimes are there in Uzbekistan in 2026?

Before 2026 the choice was almost binary: either turnover tax (the simplified special regime) or the general regime with 12% VAT and profit tax. From June 1, 2026 a third option appeared between them — the 6% simplified VAT. To choose wisely you need to understand the logic of each regime, not just compare rates head-on: 4% is not always cheaper than 6%, and 12% is not always more expensive than 6%. It all comes down to the structure of your business.

Regime 1: turnover tax (the simplified tax)

Turnover tax is a special simplified regime for small business. You pay a fixed percentage of all revenue and do not administer VAT: no input or output tax, no complex credits. The base rate for legal entities in most industries is 4% (Art. 467 of the Tax Code). Certain activities have reduced rates — for example e-commerce and several others — so you should always check your own rate against the Tax Code.

The main advantage of this regime is simplicity. Less reporting, less risk of errors in invoices, lower accounting requirements. That is exactly why the vast majority of small businesses in the country operate this way.

What is the 6% simplified VAT and who is it for?

This is the year's main tax innovation. From June 1, 2026 to January 1, 2030, entrepreneurs whose core activity is trade, catering or services can voluntarily switch to a simplified VAT procedure. The idea is simple: the VAT rate is set at 6% on all sales turnover, while the profit tax is 0%. Reporting remains monthly.

The regime has a fundamental feature you must not overlook: input VAT cannot be credited. You pay 6% on all revenue and do not reduce that amount by the VAT paid to suppliers. The usual benefits, preferences and VAT-refund procedure also do not apply. At the same time your buyers keep the right to credit your VAT — which matters for working with corporate clients.

Who cannot use simplified VAT: companies with a state share of 50% or more, and large taxpayers. For catering there is an additional refund of part of the VAT at 40% regardless of the share of cashless revenue — but that is a separate support measure to be calculated individually.

Regime 3: standard 12% VAT

This is the general regime. You become a full VAT payer: you charge 12% on your sales (output VAT) but also credit the input VAT paid to suppliers. Only the difference goes to the budget. In parallel, profit tax is paid on the financial result.

The formula the whole regime rests on:

VAT payable = Output VAT (12% on sales) − Input VAT (credited)

This means the real VAT burden depends not on the 12% rate but on your value added. If you buy goods from VAT suppliers and resell with a small markup, almost all input VAT is credited and you remit little to the budget. The export of goods is taxed at 0% while preserving the right to a credit.

Comparison table of the regimes

Let's bring all three regimes into one table — the central reference point when choosing.

Note the key difference: input VAT can be credited only under the standard regime. That is precisely why the choice between 6% and 12% is not "lower is always better." If you have a lot of input VAT, the standard 12% can turn out cheaper than 6% on all turnover.

Calculating the tax burden with an example

Theory without numbers does not convince. Take a trading company with the same inputs and calculate tax under all three regimes. The inputs are deliberately simple and transparent.

Starting data:

• Revenue for the period: 1,000 million sum (excluding VAT).
• Purchase of goods from VAT suppliers: 700 million sum (excluding VAT), plus input VAT at 12% = 84 million sum.
• Other costs without input VAT (salaries, VAT-free rent): 150 million sum.
• Pre-tax profit: 1,000 − 700 − 150 = 150 million sum.

Now let's calculate tax under each regime.

Turnover tax (4%)

Everything is calculated on all revenue, without credits:

• Tax: 1,000m × 4% = 40 million sum.
• The 84m of input VAT sits in the cost base and is not recovered as tax, but it is already included in the purchase price.

Simplified VAT (6%)

A higher rate, also on all turnover, with 0% profit tax:

• VAT: 1,000m × 6% = 60 million sum.
• Input VAT cannot be credited; profit tax is 0%.

Standard VAT (12%) + profit tax

Here the credit mechanism works. Suppose we take the profit-tax rate at a nominal 15% — always check the exact rate against the Tax Code for your activity.

• Output VAT: 1,000m × 12% = 120m.
• Creditable input VAT: 84m.
• VAT payable: 120 − 84 = 36 million sum.
• Profit tax: 150m × 15% = 22.5 million sum.
• Total: 36 + 22.5 = 58.5 million sum.

The key takeaway from the calculation: the larger the share of input VAT in costs, the more attractive the standard 12% regime with a credit becomes — and conversely, with a high margin and small purchases, the simple turnover tax wins. The 6% simplified VAT is good as a "middle ground" — when you need VAT-payer status for clients but do not want to administer credits.

How do you choose a tax regime in Uzbekistan?

1. 1

   Check turnover against the threshold

   Compare annual turnover with the 12,000 BCU threshold (≈4.944bn sum). If you exceed it, the general regime is mandatory and the choice narrows to the VAT regimes.

2. 2

   Assess the share of input VAT

   Calculate what share of your costs comes from purchases from VAT suppliers. A high share is a signal in favor of the standard 12% with a credit.

3. 3

   Look at your clients

   If your buyers are VAT companies that need to credit your tax, the VAT regimes (6% or 12%) make you a convenient supplier.

4. 4

   Weigh margin and simplicity

   With a high margin and simple accounting, turnover tax often wins. If you need a balance of "VAT for clients + simplicity", look at the 6% simplified VAT.

5. 5

   Calculate on your own numbers

   Bring all three regimes into one calculation using your revenue, purchases and costs — and choose by the final tax amount, not by the rate.

Common mistakes when choosing a regime

When each regime pays off: a quick cheat sheet

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