Uzbekistan: Permanent Establishments: Key Features And Taxation

Last Updated: 20 April 2017
Article by Kosta Law Firm

Today's Legal Highlight is dedicated to such complex topic as permanent establishment ("PE"). Under Uzbek Law, PE is not considered as separate legal entities and used solely for tax purposes.

Below we briefly touch upon those provisions on PE set in article 20 of the Uzbek Tax Code that are either different from or supplement the OECD Model Tax Convention on Income and Capital.

It should be noted that the principle of supremacy of international law is recognized in the Uzbek legislation. This principle is fixed, among others, in article 4 of the Uzbek Tax Code. Hence, one should always consult relevant Double Tax Treaty that Uzbekistan has concluded with the other states to see whether there are any discrepancies. 

Permanent Establishment
  • any place through which business is being carried out;
  • carrying out business for more than 183 days within any subsequent 12-month period
  • any place related to production, processing, making complete set, packaging and sale of goods;
  • any place related to pipelines, gas pipelines, exploration of natural resources;
  • any place related to installation, assembling, erection, setting, commissioning and/or maintenance of equipment;
  • operation of game machines (including play-stations), computer networks, amusement rides, transportation and other infrastructure;
  • sale of goods through warehouses located at Uzbekistan and belonging to, leased or used by the non-resident on any legal grounds;
  • doing any works, rendering any services, and conducting any activities, except for those included in the exclusions.
  • use of facilities solely for the purpose of storage, display and/or delivery of goods belonging to the non-resident prior to sale of the goods;
  • operations on export and import of goods to Uzbekistan done exclusively in the name of the non-resident;
  • possession of shares, participatory interest in the capital funds of the residents of Uzbekistan as well as possession of any other property in the territory of Uzbekistan;
  • secondment of personnel to residents of Uzbekistan for undertaking of works in Uzbekistan provided such personnel acts in the name of and in the interests of the resident to whom such personnel was seconded.
Date of creation
  • On the date of commencement of works, services;
  • For construction (installation, assembly, erection) works – from the date of transfer of a construction site to the contractor.
Date of termination Date of termination of activities through permanent establishment:
  • day of signing the act of acceptance of performed works and/or rendered services;
  • day of issuance of the last invoice for works performed and/or services rendered;
  • day of submission of the final report on calculation of the profit tax to the state tax authorities of Uzbekistan,
whichever is later.
Bank Accounts in UZS Foreign legal entities through their PEs may open bank accounts in UZS that can be used for paying:
  1. taxes and other mandatory payments;
  2. transfer to foreign entity's other accounts opened in banks of Uzbekistan
  3. operating expenses of PE including:

    • rental costs;
    • utility payments and other similar payments;
    • purchase of commodities and materials necessary for daily operations of PE;
    • communication channel lease payments;
    • costs of shipping and delivery of goods;
    • costs for mailing and periodicals;
    • salary payments and remuneration for employees;
    • employee travel expenses;
    • insurance premiums for mandatory and volunteer insurances;
    • medical treatment of employees in case of accidents and deceases.
Foreign entities may deposit the following monetary funds into the PE's bank accounts:
  • funds from sale of goods, performance of works and services and carrying out PE's other activities in Uzbekistan;
  • funds from PE's other bank accounts opened in banks of Uzbekistan;
  • funds from sale of foreign currency to its servicing bank.
Bank accounts in foreign currency Foreign legal entities through their PEs may open bank accounts in foreign currency that can be used:
  1. for covering employees' travel expenses in foreign currency for business trips outside of Uzbekistan;
  2. to sell foreign currency to its servicing bank in Uzbekistan;
  3. to be transferred to other bank accounts of PE in Uzbekistan;
  4. for other legitimate purposes.
Foreign entities may deposit the following monetary funds into the PE's bank accounts:
  • funds transferred from bank accounts of foreign entities abroad;
  • funds from PE's other bank accounts opened in banks of Uzbekistan;
  • funds from sale of foreign currency to its servicing bank.
Import Foreign entities acting through PE may import in its name goods (works and services) into Uzbekistan.


Corporate Income Tax Net income before tax adjusted for non-deductible expenses 7.5%
Net Profit Tax Net income after Corporate Income Tax 10%
Property Tax Average annual net book value of fixed assets (incomplete construction and uninstalled equipment) accounted for in the books of PE 5%
Land Tax Area of land plots owned or used Rates vary depending on the location and type of land parcel
Water Use Tax Volume of consumed water from surface and underground sources 1 cubic meter of surface water – UZS 85.4

1 cubic meter of subsurface water – UZS 108.5
Unified Social Payment Total remuneration payable to staff (local and foreign) 25%
Personal Income Tax (as tax agent) Income paid to employees including in-kind benefits 0-1 MMW1 - 0%
1-5 MMW – 7.5%
5-10 MMW - 17%
10+ MMW - 23%
Contribution to Pension Fund (as tax agent) Total remuneration payable to local staff and foreign staff permanently living in Uzbekistan 8%


1. As of March 2017 one minimal monthly salary equals to UZS 149.755, which is equal to approximately USD 43.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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