Tax Alert / Issue No. 1 / 19 January 2016 Changes in tax rates effective in 2016 / Amended legislation on joint stock companies

Transcription

1 Tax Alert / Issue N. 1 / 19 January 2016 Changes in tax rates effective in 2016 / Amended legislatin n jint stck cmpanies Changes in 2016 In this issue, we have summarised ntable recent amendments in the Uzbek legislatin Presidential Decree N. ПП-2455 f 22 December 2015 Presidential Decree N. ПП-2455 f 22 December 2015 revises the rates f certain taxes and intrduces sme changes t the tax legislatin. Belw, we describe the mst ntable changes effective as f 1 January Minimum rate f persnal incme tax (PIT) is decreased frm 8.5% t 7.5%. It applies t the prtin f mnthly incme exceeding 1 MMW 1 and capped at the level f 5 MMW. The prtin f mnthly incme f up t 1 MMW is nt taxable. Individual pensin fund cntributin rate is increased frm 7% t 7.5%. Unified tax payment rate fr micrfirms and small enterprises engaged in services is decreased frm 6% t 5%. Unified land tax payable by prducers f agricultural prducts is decreased frm 6% t 0.95% f the nrmative value f agricultural land. We understand that such cnsiderable decrease is due t recent revaluatin (increase) f nrmative value f agricultural land. 1 MMW (Minimum Mnthly Wage) is fixed at UZS 130,240 (apprx. USD 46)

2 Prperty tax rate fr legal entities is increased frm 4% t 5%. Prperty tax fr individuals increases frm 1.3% t 1.5%. Tax rates fr individuals wning flats and huses in cities with the ttal area f mre than 200 and 500 square metres increase frm 1.6% t 1.8%, and frm 2.2% t 2.5% respectively. Land tax rates fr legal entities and individuals and water use tax rates fr individuals are raised apprximately by 15%. Excise tax rates fr prductin f alchlic drinks and cigarettes (and certain ther gds) are increased. Fr example, excise tax rate fr prductin f cigarettes increased frm UZS 19,196 t UZS 28,794 fr 1,000 cigaretes, excise tax fr prductin f beer increased frm UZS 4,106 t UZS 5,133 fr 10 litres. Excise tax rates fr imprt f certain types f prducts increased. Fr example, excise tax rates fr imprt f edible il and technical il increased fr 5%. Excise tax intrduced in respect t certain gds, e.g. 70% rate n small-sized trucks. Custms duties intrduced in respect f the fllwing prducts (washing mashines greater f 30% r 30 USD per piece, lightning equipment greater f 30% r 1.5 USD per each kilgram etc.). Mnthly fee payable by mbile peratrs fr each custmer number is increased frm UZS 750 in 2015 t UZS 1,500. Obligatin n emplyers t cver maternity allwance is further extended until 1 January 2017 (prir t 1 January 2010 it had been paid at the csts f scial insurance bdies). Validity f certain benefits extended until 1 January 2018, including the fllwing: exemptin frm prperty tax fr entities in textile industry (intially prvided by the Presidential Decree N.ПП-733 f 21 Nvember 2007); eligibility f textile cmpanies within Uzbekengilsanat assciatin t sell their semi-finished textile prducts fr hard currency within the territry f Uzbekistan at zer rate VAT (initially prvided by the Reslutin f the Cablinet f Ministers N.141 f 25 March 2004), while the prerequisite f 80% minimum exprt share is ablished; exemptin frm payment f imprts custms duties in respect t certain chemicals, accessries etc. imprted by cmpanies within Uzbekengilsanat assciatin (initially prvided by the Reslutin f the Cabinet f Ministers N.141 f 25 March 2004); tax and custms benefits (exemptin frm crprate incme tax, unified tax payment, prperty tax, imprt custms payments) fr entities prducing nn-fd cnsumer gds prvided by Presidential Decree N. ПП-1050 f 28 January Exemptin frm custms payments prvided fr cmpanies imprting equipment, spare parts, ingrideints and cmpnents used in prductin and prcessing f dairy, meat, milk, fruit and vegetable prducts extended until 1 January 2019 (initially prvided by the Presidential Decree N. ПП-1633 f 31 Octber 2011). 2 PwC

3 Number f tax benefits are ablished, including: exemptin frm crprate incme tax fr jint-ventures wrking within Uzbekengilsanat and Mahaliy sanat assciatins with minimum freign participatin f 50% (prvided by Reslutin f the Cabinet f Ministers N.166 f 29 April 1996); reductin f taxable incme f legal entities fr investments in implementatin f quality management systems (prvided Decree f the Cabinet f Ministers N. 349 f 22 July 2004); 5% reductin f applicable crprate incme tax rate r unified tax payment rate fr service cmpanies (with exceptin f cmmercial banks) in respect f sales paid by use f plastic cards. New minimal level f freign sharehlding in jint stck cmpanies Presidential Decree N. ПП-2454 f 21 December 2015 requires jint-stck cmpanies (except thse engaged in prductin and prcessing f strategic materials as well as natural mnplies and suppliers f scially-imprtant gds and services with regulated tariffs) t have at least 15% f freign sharehlding by 1 July Jint-stck cmpanies (JSC) that d nt cmply with the abve requirement shall be rerganised int ther legal frms. Mrever, JSCs with freign participatin f 15-33% wuld be eligible t tax benefits (diferrentiated depending n vlume f freign investment) as stipulated by the Presidential Reslutin N. УП-3594 f 11 April Previusly, these benefits were precnditined with the requirement f minimum 33% freign participatin. The Reslutin N. УП-3594 als exempts freign investrs frm taxatin f dividend incme until 1 January Until the same date JSCs are exempt frm payment f state duties fr applicatin t the curt in case f vilatin f legal rights and interests with their further cllectin frm the party in fault. * * * PwC wuld als like t remind yu f appraching deadlines fr PERMANENT ESTABLISHMENT and PERSONAL INCOME TAX annual filings. PERMANENT ESTABLISHMENT tax filing dates fr 2015 returns are as fllws: Prperty Tax 25 January 2016; Land Tax 15 February 2016; Crprate Incme Tax 25 March PERSONAL INCOME TAX (PIT) return fr 2015 is due befre 1 April In accrdance with the Tax Cde, Uzbek PIT is paid by tax residents - n their wrldwide incme, and by nn-residents n their incme received frm Uzbek surces. An individual is deemed t be a tax resident if he/she spends 183 days and mre during any 12-mnth perid ending in the reprting year. 3 PwC

4 The Tax Cde further states that if a freign natinal has becme tax resident prir t 1 April f the year fllwing the reprting ne (i.e. has arrived in Uzbekistan prir t Octber 2015 and stayed thrugh 1 April 2016), he/she is required t file a PIT declaratin fr the reprting year (i.e. 2015). Please feel free t cntact us with queries n the annual tax filing requirements r in case yu need supprt n ther tax issues. 4 PwC

5 Let s talk Fr a deeper discussin f hw this issue might affect yur business, please cntact: Michael Ahern, Partner, Tax michael.ahern@kz.pwc.cm Otabek Muhammadiyev, Directr, Assurance tabek.muhammadiyev@uz.pwc.cm Jamshid Juraev, Senir Manager, Tax jamshid.juraev@uz.pwc.cm Audit Organizatin PricewaterhuseCpers LLC 88A, Mustaqillik prspekt, Mirz-Ulugbek district, Tashkent , Republic f Uzbekistan T: +998 (71) , F: +998 (71) , PwC. All rights reserved. Nt fr further distributin withut the permissin f PwC. "PwC" refers t the netwrk f member firms f PricewaterhuseCpers Internatinal Limited (PwCIL), r, as the cntext requires, individual member firms f the PwC netwrk. Each member firm is a separate legal entity and des nt act as agent f PwCIL r any ther member firm. PwCIL des nt prvide any services t clients. PwCIL is nt respnsible r liable fr the acts r missins f any f its member firms nr can it cntrl the exercise f their prfessinal judgment r bind them in any way. N member firm is respnsible r liable fr the acts r missins f any ther member firm nr can it cntrl the exercise f anther member firm's prfessinal judgment r bind anther member firm r PwCIL in any way. The material cntained in this alert is prvided fr general infrmatin purpses nly and des nt cntain a cmprehensive analysis f each item described. Befre taking (r nt taking) any actin, readers shuld seek prfessinal advice specific t their situatin. N liability is accepted fr acts r missins taken in reliance upn the cntents f this alert. 5 PwC