Uzbekistan simplifies reporting on rental income tax for individual entrepreneurs

Uzbekistan plans to simplify the processes for verifying employment records, calculating pension supplements, and organizing various types of payments through amendments approved by a government decree dated October 19.

These changes are being made to the current legislation on the assignment and payment of pensions, adopted in 2022. The goal of these reforms is to strengthen the social protection system and increase the accessibility of pension services as the Pension Fund transitions to a more optimized operational system.

For citizens who worked in organizations between 2005 and 2016, the process of confirming work experience will become easier. If the relevant records are in the employee's employment record book and the employer annually paid mandatory contributions to the employee's individual accumulated pension account, this period will be counted towards service time without the need to provide an archive certificate.

Additionally, the time spent caring for a child with a disability until they reach the age of 18 will be taken into account in the work experience. An electronic medical assessment will suffice, eliminating the need to submit additional documents.

The maximum amount of pension supplements due to an individual will be calculated proactively, without requiring the recipient to submit an application. Automated procedures will also apply to the extension of pension payments after reassessment or extension of disability group, as well as to recalculating pensions upon assignment of the first disability group and adjusting survivor's benefits when the number of family members changes.

Furthermore, pension supplements will be assigned and paid proactively to citizens who reach the age of 100. Payments will continue even if the identification card is replaced due to expiration or early renewal. Pensioners will also be able to more easily request the transfer of payments when changing residence by submitting applications through public service centers or the Unified Portal of Interactive Public Services.

An experimental reporting procedure is being introduced in Navoi and Chirchik for residents, requiring them to annually declare their financial transactions. This new regulation mandates the disclosure not only of earned income but also information on property ownership, outstanding loans, and utility payments.

The adoption of this new procedure was made by a government decree. It applies to all adult citizens permanently registered in Navoi and Chirchik. The declarations that need to be filled out will cover income received in 2026 and 2027.

Declarations can be submitted either through the electronic tax services portal or using the Soliq mobile application. Citizens must send the document to the tax authority at their permanent place of residence no later than April 1st of the following year. The tax service is obliged to notify the population about the approaching deadline at least one month in advance.

The declaration requires reporting salary, income from property, and other receipts. Furthermore, it is necessary to record expenses related to real estate, movable property, paid taxes, utilities, and loans. However, expenses related to the business of individual entrepreneurs and self-employed persons will not be taken into account.

A significant portion of the information will be obtained automatically by the system from various sources, including state databases, receipts registered in the Soliq application, and electronic invoices. If automatic data retrieval proves insufficient, the citizen can supplement the information independently through the application.

The system allows for the amendment of the declaration if errors are found. However, if inaccuracies persist, the document may be rejected upon the citizen's request. In such cases, resubmission of the declaration is possible within three years; refusal to accept the document for other reasons is prohibited.

It is important to note that a simple increase in the difference between income and expenses will not automatically result in the assessment of additional taxes or the application of any sanctions, except in cases stipulated by Article 393 of the Tax Code. Previously, amendments were made to the Criminal Code and the Code of Administrative Liability in Uzbekistan, leading to stricter penalties for tax evasion.