Reimbursements of VAT to restaurants, hotels and tour operators to tackle VAT fraud
A new round of sectors will be offered VAT refunds in cases where they only accept electronic forms of payment with consumers. The announcement was made in Presidential Decree “On Measures to Implement Tasks Defined in the Fourth Open Dialogue of the President of the Republic of Uzbekistan with Entrepreneurs”
The refunds will be available, as follows:
- Tour operators and hotels from 1 Oct 2024 – 20% of VAT due will be refunded if operators accept at least 60% of payments in electronic form
- Catering and restaurants from 1 Jan 2025 – 40% of VAT due will be refunded if operators accept at least 60% of payments in electronic form
Refunds will be made to eligible taxpayers by payment on the 25th of the month following the VAT return declaration.
Uzbekistan VAT
The tax is administered by the State Tax Committee of Uzbekistan, which also monitors adherence to VAT regulations.
The standard VAT rate in Uzbekistan is 12%. This applies to most goods and services, both domestically produced and imported. Businesses with annual turnover exceeding a specific threshold (around US$ 1 billion) are required to register for VAT and collect it on behalf of the state. VAT is charged at every point of sale in the supply chain, but businesses are allowed to deduct the VAT they’ve paid on inputs (known as input tax credits) from the VAT they charge on sales (output tax). This ensures that the tax is only levied on the value added at each stage.
Certain goods and services are either exempt from VAT or subject to reduced rates. These include basic foodstuffs, certain medical supplies, educational services, and financial services, which are either exempt or subject to a 0% VAT rate. Exported goods also benefit from a 0% VAT rate, allowing exporters to reclaim VAT on inputs.
VAT is a significant source of revenue for the Uzbek government, helping to fund public services and infrastructure. Compliance and reporting requirements are strict, with penalties for non-compliance. Businesses must submit monthly VAT returns and ensure accurate record-keeping.
