Uzbekistan introduces temporary VAT refund mechanism for jewelers

The government of Uzbekistan has approved a new temporary mechanism for the partial refund of value-added tax (VAT) for businesses in the jewelry sector. The measure, designed to support producers and retailers, will be in effect until January 1, 2028.

The policy is established by amendments to a government resolution dated November 7, 2024. It outlines the procedure for refunding part of the VAT paid to the state budget by entrepreneurs engaged in jewelry manufacturing and retail sales.

Starting from January 1, 2026, eligible businesses will be able to claim a refund of 80% of the VAT they have paid. The right to this compensation arises after filing tax returns, and applications must be submitted no later than three months from the date of tax payment. The review process will be handled through an automated system.

The automatic refund is contingent on meeting specific criteria. The VAT must be fully paid into the budget between the 1st and 20th day of the reporting month. Furthermore, income from jewelry production and/or sales must constitute at least 80% of the company's total revenue.

Businesses are also required to correctly list product nomenclature and identification codes in their invoices or cash register receipts.

For jewelry manufacturers specifically, a special method for determining the taxable base is introduced. It will be calculated based on the positive difference between the selling price of finished items and the cost of the precious metals and stones contained within them.