March 17, 2014
Support for Investors and Exporters
The tax policy in Uzbekistan is considered by many experts as one of the main factors in the constant increase in the foreign investment flow in spearheading modern competitive industries, specializing in manufacture and export of quality products.

Statistics confirms this. In 2013, the foreign trade turnover increased by 9.4%, including the rise in exports by 10.9% and imports by 7.7%. The foreign trade surplus has reached US$1.3b. These figures are suggestive of enormous efforts undertaken to create unique conditions in the country for domestic and foreign investors, to support exporters, encourage modernization and technological re-equipment of production.

A key factor is privileges and preferences that contribute to raising funds in the economy and thereby allow for a short time to create modern production, and therefore new jobs. A particular attention is paid to enterprises for export their own products, so not only are involved in the country for more foreign exchange, but also in the global market is moving the country\'s image.

To stimulate and increase production to foreign markets, today a comprehensive system of tax benefits and preferences is created in the country. For example exports, except for specific categories, are not subject to excise tax. For exporting enterprises income and property tax rates down by the share of exports of goods and services in total production. For instance, if exports share is from 15% to 30%, the business entity receives a 30% reduction, while those with export proportion exceeding 30% are to have over 50% exemption. In the same amounts rate of single tax payment reduced for micro and small enterprises. In addition, they are exempt from mandatory sale of 50% of foreign currency earnings, coming from exports. Another additional incentive for the participation of enterprises in international economic relations is the abolition of export duties and export licensing products. All this complex of benefits enables enterprises to accumulate substantial foreign currency funds and direct them to boost and promote efficient production capacities.

Among the examples of the successful use of opportunities is the domestic textile industry. Today it concentrates not only a huge number of enterprises with foreign investment, but also manufactures, sending most of its products to other countries. Last year, the volume of exports by industry exceeded US$827.3m with a growth rate of 17.3% by 2012. Last year, the number of exporters increased 45-fold, reaching 252, discovered five new markets of Tunisia, Nigeria, Kenya, Sri Lanka and Estonia. Products of the textile industry are now available in48 states. This was made possible also thanks to extended benefits. In particular, enterprises exporting at least 80% of its finished products, as well as over 60% of semi-finished goods from the total volume of production, released before the end of 2015 from paying property tax.

Much attention is paid to enterprises with foreign investment engaged in export-import operations. For example, companies that specialize in the manufacture of products in a number of industries are exempted from payment of tax on corporate income, property, for the improvement and development of social infrastructure, the single tax and mandatory contributions to the National Road Fund. It is worth noting that it is imperative that the investor must send at least 50% of the income derived from the benefits given to the further development of the company.

In Uzbekistan, today there are several criteria for receipt of these preferences. Thus, the benefits apply to investors, who invested in the country\'s economy a certain amount of funds from 300,000 US dollars to 3m dollars for three years, from US$3m to US$10m - for five years, more than US$10m - for seven years. At that, the share of foreign participants in the authorized capital of a company shall be not less than 33%, and production facility located in every city and village of the country, except Tashkent city and Tashkent region.

(Source: “Uzbekistan Today” newspaper)


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