Another benefit for business entities: Tax benefits to be extended
An invisible disaster – the coronavirus damages not only human life, but also all areas and sectors of the economy. Today, the scale of the disease has increased in Uzbekistan, in connection with which the previously softened lockdown rules have been strengthened. This is forcing many entrepreneurs to suspend activities again. But there is no reason to worry.
According to the decree of the Head of the state signed on July 20 this year “On additional measures to support the population, business entities, public catering, trade and services for reducing the negative impact of the coronavirus pandemic” business entities are provided with additional benefits. In particular, in order to provide additional support to business entities in catering, trade and services, during the coronavirus pandemic, to maintain their income, as well as to preserve jobs in the period from July 1, 2020 to December 31, 2020, they are exempt from paying value added tax of catering establishments and companies specializing in provision of premises for rent. Individuals are also temporarily exempted from paying tax on income received from the provision of real estate for rent.
From April 1, 2020 to December 31, 2020, catering establishments are exempt from paying fees for the right to carry out retail trade in alcoholic products; the effect of the incentive to reduce the amount of deductions from wholesalers of alcoholic beverages from 5 to 3 percent is extended until December 31, 2020.
From July 1, 2020, the maximum average annual number of employees for public catering enterprises will increase from 25 to 50 people to classify them as small enterprises, with the extension of benefits and preferences granted to small businesses.
Another innovation: A procedure has been introduced according to which, until July 1, 2021, catering establishments, as quarantine restrictions are lifted, have the right to place free of charge on adjacent vacant land plots and equip light structures for serving consumers with food by notifying the khokimiyats of districts (cities), taking into account compliance with temporary requirements for their location, arrangement and operation. That is, business entities, as quarantine restrictions are lifted, are given the right to trade through car stores, auto shops, trailers, tankers and food trucks by notifying the state tax authorities indicating the time, goods and places of trade that are not prohibited for parking a vehicle, without concluding an agreement with local executive authorities.
Temporary requirements for the placement, arrangement and operation of light structures for serving consumers with food are approved by the Cabinet of Ministers of the Republic of Uzbekistan.
As noted in the decree, in 2020, in cases determined by the State Tax Committee of the Republic of Uzbekistan, no penalty is imposed for failure to submit tax returns within the time period established by tax legislation, if no more than five days have passed from the deadline for submitting tax returns.
By this decree, until December 31, 2020, the following tax benefits and preferences established by the decree of the President of the Republic of Uzbekistan of May 18, 2020 are extended:
for exemption from property tax and land tax for:
small business entities;
markets and shopping malls, cinemas, catering establishments, public transport enterprises, sports and recreation facilities, as well as legal entities engaged in transportation of passengers, provision of consumer services and premises for rent, including for holding banquets;
to reduce the social tax rate from 12 to 1 percent for microfirms and small enterprises, with the exception of manufacturers of excisable products, state enterprises, legal entities with a state share in the authorized capital of 50 percent or more;
for the provided to microfirms and small enterprises engaged in foreign economic activity at least one year before the day of contacting the customs authorities, deferred payment of customs duties and excise taxes levied on the import of goods, except for consumer goods, with the subsequent payment of the deferred amount in equal installments within 120 days;
to suspend the collection of taxes, penalties and fines charged for violation of tax legislation from microfirms and small enterprises as of May 15, 2020.
In conclusion, we can say that the next support of the Head of the state is another opportunity for entrepreneurs who are currently without income. Only these benefits should be used in full compliance with the rules of hygiene and quarantine. Otherwise, we all understand what the consequences can be.
Deputy Speaker of the Legislative
Chamber of the Oliy Majlis,
Head of UzLiDeP faction