Uzbekistan Introduces VAT Refund Mechanism for Jewelry Industry

The Cabinet of Ministers of Uzbekistan has approved amendments to a series of government resolutions, simultaneously declaring some previously effective norms invalid.

Among the key innovations is the introduction of a temporary mechanism for refunding part of the value-added tax (VAT) to entrepreneurs operating in the production and retail sale of jewelry.

These provisions are enshrined in the updated version of Government Resolution No. 745 dated November 7, 2024. The document approves regulations governing the procedure for refunding part of the VAT paid to the budget by business entities in the jewelry sector, as well as the mechanism for determining the tax base for this levy.

It is established that this procedure will be in effect until January 1, 2028.

According to the resolution, starting from January 1, 2026, entrepreneurs engaged in manufacturing and/or retail sales of jewelry will be eligible for an 80% refund of their paid VAT from the state budget.

The right to a refund arises after filing tax returns. Applications for compensation must be submitted no later than three months from the date of tax payment. The review of applications will be carried out through an automated system.

The partial VAT refund is processed automatically upon meeting several conditions. Specifically, the tax must be fully paid into the budget between the 1st and 20th day of the reporting month. Furthermore, income from manufacturing and/or selling jewelry must constitute at least 80% of total revenue.

Correct reflection of product nomenclature and identification codes in invoices or cash register receipts is also required.

A special procedure for determining the tax base is established for jewelry manufacturers. It is calculated based on the positive difference between the selling price of items and the cost of precious metals and stones contained within them.