Uzbekistan may introduce new Value Added Tax (VAT) exemptions for specific projects implemented in partnership with international financial institutions (IFIs) and foreign government financial organizations.
This initiative is outlined in a bill titled "On Amendments and Additions to Certain Legislative Acts in Connection with Establishing a Special Taxation Procedure for Existing and Future Projects Funded by International Financial Institutions and Foreign Government Financial Organizations."
According to the document, goods and services purchased as part of projects financed through public external debt and executed alongside IFIs could be fully exempt from VAT.
To ensure a level playing field for domestic producers and importers, the bill proposes a revamped framework for calculating VAT.
Furthermore, the bill proposes granting project participants the autonomy to voluntarily opt out of these VAT exemptions. This flexibility allows the exemptions to be waived entirely for the project's duration or suspended for a specified period.
The bill also includes a provision to extend current VAT exemptions until January 1, 2028, for specific initiatives within the water supply and sanitation sectors.
In addition, goods and services acquired through technical assistance and grant-funded projects will also be eligible for VAT exemptions.
As specified in the document, the new legislation is set to take effect on August 1, 2026.
