The Cabinet of Ministers of the Republic of Uzbekistan recently approved Resolution No. 167, focusing on VAT and excise tax incentives for goods and services in projects financed by International Financial Institutions (IFIs).

Resolution No. 167 aims to improve Uzbekistan’s investment and business climate, promoting foreign investments by offering VAT reimbursement for projects financed by IFIs and approved after 1 July 2020, eliminating investors’ and employers’ VAT liability under specified conditions.

The full text of the order is available here (in Uzbek).

Below, we provide you with a brief overview of the key points:

1. VAT expenses cannot be covered by IFI loans.
2. VAT is reimbursed from the state budget for imported goods for self-use by project groups or executive agencies. A reimbursement request must be submitted to the tax authority.
3. It defines the project’s participant (employer, general contractor, subcontractor, project group, and execution agency) but does not include a supplier.
4. VAT payment procedures vary, depending on whether the project was approved before or after 1 July 2020.

1. For projects approved prior to 1 July 2020, VAT and excise tax exemptions apply if the project is directly financed by IFIs without refinancing.
2. For projects approved after 1 July 2020, if financed by IFIs and repaid from the state budget, borrowers can receive VAT reimbursement and a deferment on VAT payments for 120 days. If not covered by the state budget, VAT is paid using borrowers’ funds.

If you have a similar project or are considering one, our team of experts is ready to assist you in navigating these new tax incentives and ensuring you maximize the benefits available. Don’t hesitate to reach out to us for guidance and support in leveraging the improved investment climate to your advantage.