How to Choose a Tax System for a Business in Uzbekistan

Choosing a tax system is one of the first and most important steps when setting up a business. It affects not only the amount of taxes but also the scope of reporting, accounting requirements, and HR and financial operations. In Uzbekistan, entrepreneurs primarily use a simplified tax system (STS), a general regime, or specific regimes for individual entrepreneurs and small businesses.

When choosing, consider the expected turnover, expense structure, number of employees, VAT accounting requirements, and the specifics of the business. If the business has a small turnover and minimal expenses, the STS may be more advantageous. For large-scale purchases, returns, and trading with partners, the general regime offers greater opportunities for accounting for expenses and reducing the tax burden.

It’s also important to consider future growth: if you plan to expand, work with corporate clients, or engage in foreign trade, accounting and reporting under the general regime are more flexible.

The right decision is often made based on an assessment of the business model, forecasts, and planned costs and revenues. Consulting with an experienced accountant helps avoid mistakes associated with choosing the wrong system, which may prove unprofitable in a year or two.

Choosing a tax regime in a timely manner saves time, money, and eliminates the need to re-issue documents.