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Your guide to personal income tax benefits and refunds for education, mortgages, and more in Uzbekistan.
In Uzbekistan, individuals with official salaries typically have Personal Income Tax (PIT) withheld at a rate of 12% each month. However, the good news is that certain income categories are fully or partially exempt from this tax. Even better, if the tax has already been paid on these amounts, you can legally claim a portion of it back!
Key PIT Exemptions and Benefits
Uzbekistan's tax code offers several significant exemptions that can lead to a PIT refund. For instance, funds you direct towards educational expenses are often exempt. This includes your own tuition, or that of your spouse or children (up to 26 years old), at higher education institutions in Uzbekistan. This benefit also extends to educational loans and their interest payments. Additionally, parents or adoptive parents can exempt up to 3 million UZS per month per child for educational services at non-state preschools and schools.
Another significant exemption covers mortgage interest payments. Amounts paid towards mortgage loans and their accrued interest are exempt, up to 80 times the Minimum Rate of Old-Age Pension (MROT) annually, provided the property acquisition, construction, or reconstruction is made with a budget subsidy for a portion of the down payment and/or mortgage interest.
Furthermore, salary amounts voluntarily directed by an employee to Individual Accumulative Pension Accounts (INPS) at the People's Bank are exempt. This can be particularly beneficial for those nearing retirement, as the sum from the INPS account is paid out in a lump sum upon eligibility for a state pension. Similarly, salary amounts directed by an employee to an individual investment account for purchasing shares on the local stock market are exempt, up to 100 times the MROT annually. However, it's important to note that these funds cannot be withdrawn for 12 months from the contract's start date; violating this condition will result in the tax exemption being revoked.
Employer-provided benefits also fall under certain exemptions. This includes specific types of material assistance from an employer, such as payments for the birth of a child, marriage of an employee or their children, or for agricultural product purchase, exempt up to 4.22 times the MROT annually. Full or partial compensation for medical services (ambulatory or inpatient) for employees and their children, as well as costs for treating persons with disabilities or acquiring disability prevention/rehabilitation tools, are also exempt. Additionally, amounts paid by an employer for children's (up to 16/18 years old for students) vouchers to children's camps, sanatoriums, and wellness facilities within Uzbekistan are exempt. Finally, non-cash gifts received from an employer are exempt up to 2.11 times the MROT annually.
How to Claim Your PIT Refund
There are two primary ways to utilize these benefits: either through a direct exemption via a tripartite agreement with your employer, or by claiming an annual refund for overpaid PIT. If you choose the annual refund, the process is convenient and can be completed online.
To claim your annual refund online, follow these steps:
Step 1: Submit Your Annual Income Declaration.
When: By April 1st of the year following the reporting year (e.g., for 2024 income, declare by April 1, 2025).
Where: Electronically via my3.soliq.uz (the portal for electronic tax services).
What you'll need:
An Electronic Digital Signature (EDS/ЭЦП) issued in your name.
Income statements from all your workplaces.
Scanned copies of relevant contracts (e.g., with the university, private school, or mortgage agreement).
Scanned copies of payment receipts.
Process: Log in with your EDS, select "Declaration of aggregate annual income," and complete the three-stage form. You'll specify the type of declaration ("aggregate annual declaration"), "report" type, and the year. In the "Tax benefits" section, select the appropriate benefit category (e.g., 16.1 for university tuition, 16.2 for private schools/kindergartens, 16.4 for mortgage) and attach your supporting documents. The system will automatically calculate your refundable amount.
Step 2: Submit Your Refund Application.
When: After your declaration has been successfully submitted and processed.
Where: Via my3.soliq.uz or my.soliq.uz.
What you'll need: Your EDS and bank card details for the refund.
Process: Access the refund application form, select the tax type (e.g., "Benefits: contract payment or mortgage loan"), indicate that you wish to "Return overpaid amounts," and enter your bank card number, transit account, and bank MFO.
Your refund will typically be transferred to your specified bank card within 15 days after submitting the application. The Tax Committee also provides video instructions on their website for a visual guide through the process.
Navigating tax benefits can be complex, but understanding these exemptions can lead to significant savings. If you need assistance with preparing your declaration, understanding your eligibility, or ensuring compliance, Advizen Consulting's experts are here to help.