New legislative amendments in Uzbekistan
The aim of this alert is to provide brief review of the most important amendments. However, it is recommended to get familiarized with the text of respective legislative acts, in order to understand the new rules fully.
Resolution of the President #228 dated 30 September 2022 “”On measures to further expand the export potential of entities”.
In order to further improve the system of export support activities, the following is envisaged:
from 1 November 2022:
- if the amount of foreign currency not received under one export contract does not exceed 5% of the value of all products shipped for export, it is not considered as overdue receivables and the fine will not be applied to entities;
- incentives in the form of reducing the taxable base for corporate income tax and turnover tax are applied to exporting organizations, regardless of the share of exports in the total revenue received from the sale of goods;
- allowed export of melon seeds, castor beans, mustard, safflower.
The program “New Uzbekistan – a country of competitive products” (the “Program”) is being implemented, aimed at selecting exporting-entities through an open competition, turning them into leading exporters and comprehensive support.
Within the framework of the Program, the selection of exporting entities is carried out on the basis of the following criteria:
- exporting entities must be registered as a legal entity and carry out activities for at least the last two years;
- the exported amount of finished products within the last 12 months must exceed USD 1 million;
- the export share earnings in total revenues should exceed 30%;
- the number of types of finished products to be exported must be more than 2;
- the geography of exports within the last 12 months, excluding neighboring states, should include more than 2 countries;
- the share of overdue receivables should be less than 5%, in the volume of exports that had been made within the last 12 months
Exporting-entities included in the Program are provided with the following:
- on the basis of the application of entities, the excess part of the tax formed as a result of the application of zero-rate VAT in carrying out export and equivalent operations, is fully returned in an expedited manner within 7 days;
- in obtaining a loan to replenish working capital, commercial banks are advised to take export contracts as a collateral;
- Financial assistance is provided from the Export Support Fund on the basis of the volume of exports made during the last 12 months to finance pre-export and export trade operations in the following amount:
- up to USD 1 million – with an export volume of USD 1 million to USD 5 million;
- up to USD 2 million – with an export volume of USD 5 million to USD 10 million;
- up to USD 3 million – with an export volume of USD 10 million to USD 15 million;
- up to USD 4 million – with exports ranging from USD 15 million to USD 20 million;
- up to USD 5 million – with an export volume of more than USD 20 million;
- no more than 30 thousand US dollars for the implementation of one international standard and obtaining a certificate.