Input VAT credit in Uzbekistan: documents and reasons for refusal

Input VAT credit in Uzbekistan is available only to VAT payers and only for purchases used in taxable activities, including zero-rated transactions. For domestic purchases, the supporting document is the supplier’s electronic invoice accepted by the buyer in the system. For imports and purchases of services from a non-resident, the tax must actually have been paid to the budget. Since 1 January 2026, each invoice has also been subject to an automated risk assessment. VAT on a high-risk invoice is creditable to the extent that the supplier, or the buyer acting for the supplier, has paid it to the budget: in full after full payment, or up to the amount paid if payment is partial. The three main reasons for refusal are an unaccepted or invalid invoice; a purchase unrelated to taxable supplies or specifically excluded by Article 267 of the Tax Code; and an invoice that remains “red”. A separate issue arises when an earlier credit must subsequently be adjusted.

When input VAT can be credited

The right to a credit is established by Article 266 of the Tax Code of the Republic of Uzbekistan. Later special provisions appear in Article 266-1, non-creditable amounts in Article 267, and adjustments of previously credited tax in Articles 269 and 270. Professional commentary describes the first condition as follows: the tax must relate to goods or services used in taxable supplies, including zero-rated supplies. IT companies and consultants serving foreign customers should pay particular attention to Article 266(2). If Uzbekistan is not the place of supply of a service, no Uzbek VAT is charged, but the supply is treated as taxable for input-credit purposes. Input tax on purchases used for those services is therefore not necessarily lost.

The second condition concerns the buyer’s status. A company paying turnover tax cannot claim input VAT; it forms part of the purchase cost. The same applies to businesses using the simplified 6% VAT regime: paragraph 6 of Presidential Decree No. UP-100 of 26 May 2026 gives them no right to credit VAT on purchased goods and services. Their customers paying VAT at the standard rate may, however, credit the 6% invoiced to them. The relationship between output tax, input credits and the resulting payment is explained in our guide to the general VAT calculation rules. The key point here is that documents alone do not establish a credit without the required taxpayer status and a qualifying taxable activity.

The third condition concerns the supplier. Under the rules on special VAT registration, credits are available only for invoices issued by suppliers that have completed special registration as VAT payers and hold a valid VAT payer certificate. If the seller pays turnover tax, its invoice contains no VAT to credit. VAT separately stated by a seller that is not registered is not creditable. Decree UP-100 abolished temporary suspension of VAT payer certificates, so “the supplier’s certificate is suspended” should cease to be a reason for refusal from late May 2026. Controls have not disappeared: they have shifted to risk assessment of individual invoices.

Documents supporting an input VAT credit

For domestic purchases, the main document is an electronic invoice. The invoice rules approved by Cabinet of Ministers Resolution No. 489 of 14 August 2020 give the buyer ten days to accept it with an electronic signature or reject it with a reason. According to published explanations, unaccepted invoices do not enter the buyer’s purchase register. The tax therefore does not appear in the return until the document is accepted. An invoice should be rejected if the description, quantity, price or date does not match the actual supply. Before the buyer signs, the supplier can cancel an incorrect invoice and issue a new one. After acceptance, it issues a corrected invoice; a return, discount or price change requires an additional adjustment invoice. Careful preparation and correction of electronic invoices during the month reduces discrepancies in the return. From 2026, the tax authority prepares the return automatically, with five working days allowed for taxpayer corrections.

Different evidence applies to certain purchases. For imported goods, the credit covers VAT actually paid at customs: Article 266(1), point 3. When services are bought from a foreign company not registered for VAT in Uzbekistan, the buyer first calculates and pays tax as a tax agent and then credits the amount paid: Article 266(1), point 4. In practice, tax advisers recommend reconciling the credit with the relevant tax account, because information systems have not always matched payments to periods correctly. According to an expert explanation referring to point 9 of Annex 2 to Resolution No. 489, purchases made with a corporate bank card may be entered in the invoice register on the basis of registered cash-register receipts. This is the taxpayer’s right, rather than an obligation. The invoice risk-assessment system does not assess those receipts.

High-risk invoices: the changes introduced in 2026

Under Presidential Decree No. UP-153 of 4 September 2025 and the rules approved by Cabinet of Ministers Resolution No. 830 of 26 December 2025, each electronic invoice receives a risk classification when issued. The rules identify two levels: low risk, or “green”, and high risk, or “red”. They do not contain the medium-risk category mentioned in some summaries. The information system assesses scored criteria. The Tax Committee reports that there are 48 criteria, without publishing the complete list. Three have been publicly identified: tax-payment history, compliance by founders, and the existence of a source of income supporting the products sold. A Tax Committee notice on the new risk-assessment approach gives examples including companies registered shortly before large transactions, an absence of staff, assets or transport, inflated prices, and resumed trading after an application for liquidation. Summaries of the rules state that red invoices should not exceed 10% of all invoices issued in the reporting period. Official summaries do not clearly specify whether this limit applies to each taxpayer or to the system as a whole.

For buyers, paragraphs 14–15 of the rules mean that VAT on a red invoice is creditable only up to the amount actually paid to the budget against that invoice, and in full only after full payment. The supplier can pay it, or the buyer can voluntarily pay against the supplier’s liability. Article 266-1 treats the buyer as a tax agent in that situation. Professional publications describe entering the invoice ID in the payment order, after which the system changes the invoice to green. A queue of unpaid payment orders on the supplier’s account does not prevent this. To avoid paying the same VAT twice—once to the budget and once in the supplier’s price—advisers recommend agreeing in the contract that the buyer may pay VAT on risky invoices directly to the budget, together with the resulting settlement arrangements. Otherwise, the buyer may pay the full VAT-inclusive price and wait for the supplier to settle its tax, delaying the credit and creating a cash-flow gap. If a red invoice turns green later, the credit moves to a later period. The 2026 VAT return has separate lines for these amounts, including balances from the previous year.

Green status does not make a credit final. Professional commentary on the amended Code explains that the tax authority can cancel or adjust a credit even on a low-risk invoice if the transaction is proven fictitious or fraudulent. An exception applies to an invoice that was red and for which the buyer itself paid the tax. In February 2026, the Tax Committee clarified that the system assesses dealings between the particular pair of counterparties, rather than the entire supply chain, and does not make buyers responsible for remote suppliers’ tax compliance. Technical problems nevertheless occur. In August 2026, invoices from some suppliers that had moved to the 6% rate appeared red because the system did not recognise payments made under a separate tax code. The Tax Committee promised a same-day correction. Check the status of each substantial invoice before filing and check the counterparty before payment, rather than after the credit has already been deferred.

VAT amounts that cannot be credited

Article 267 lists cases where input VAT is included in acquisition cost instead of credited. Professional summaries include fixed assets, real estate and intangible assets acquired for exempt activities, together with goods and services used to construct, modernise or repair them; goods and services for exempt supplies; business entertainment expenses; goods and services received free of charge, except those received from foreign persons with tax paid on receipt; and purchases for the business’s own needs where the expenditure is not deductible for profit tax. Passenger cars, motorcycles, helicopters, motorboats, aircraft and fuel for them, as well as alcohol and tobacco, are separately mentioned where their acquisition is unrelated to business activities. This list follows professional explanations; check the current Code before making a decision on a substantial purchase.

Passenger cars require particular care. Tax authorities require a reversal where a director or employee uses a vehicle privately. A 2026 explanation referring to Article 267(2) states that the credit can be retained where an order assigns the vehicle to employees and business use is supported by trip sheets, fuel write-off documents, a compulsory motor-liability policy listing permitted drivers, and other records. For mixed use, the credit is reduced in proportion to private trips under rules set out in the accounting policy. If the company makes both taxable and exempt supplies, Article 268 adds another requirement. Tax on common purchases is allocated using separate accounting or the proportional method selected in the annual accounting policy. Separate accounting for input VAT therefore requires its own calculation.

When a previously claimed credit must be adjusted

A credit correctly claimed on acquisition may require a later adjustment. Professional explanations of Article 269(1) identify these circumstances: goods or services start being used in exempt supplies; damage or loss exceeds normal wastage limits; the supplier’s invoice is declared invalid through the prescribed procedure; the company loses VAT payer status or receives an exemption; or goods are stored at rented or freely used premises whose agreements are not registered with the tax authorities. The damage and loss rule does not apply where an emergency—natural disaster, fire, industrial accident or road accident—caused the loss. The adjustment is made in the period when its basis is identified. The taxpayer’s personal account has a VAT-adjustment service where the affected invoice ID is entered.

The most difficult case is a supplier transaction declared fictitious following desk-based control. The buyer may then be asked to reverse the entire earlier credit on that supply, even if the goods were actually received and paid for. A related issue affects businesses moving to 6% VAT. The Tax Committee requires adjustment of VAT previously credited on remaining inventories and long-term assets, although advisers argue that the decree contains no express provision requiring this. As of October 2026, the issue remains disputed. Before switching to the simplified regime, calculate the potential adjustment using your own remaining assets.

How to defend a credit challenged by the tax authority

Challenges increasingly arise through automated procedures: invoice risk assessment, pre-audit analysis, or comparisons between reports. A system flag is not, by itself, an established violation. Experts point out that mechanically comparing profit-tax expenses with purchases in the VAT return creates discrepancies where no invoice is required, including rent paid to individuals, royalties, overseas business travel and corporate-card purchases. After receiving a notice, first identify which figures and taxes have been compared and reconcile the difference transaction by transaction. If the challenge concerns whether a transaction was real, it is not enough to say that the supplier was absent from lists of suspicious businesses. Supporting evidence includes the agreement, acceptance records, transport or service-delivery documents, and statements reconciling the supplier’s tax account at the transaction date and for the invoice month. Ask the supplier for these while it is still trading; it generates them through its personal account. In the practice cited by advisers, reconciliation statements confirming the counterparty’s tax payment are often decisive in the buyer’s favour in court. From 1 July 2026, Decree No. UP-95 of 19 May 2026 removed the obligation to submit amended returns or supporting documents for discrepancies found through pre-audit analysis. The analysis itself remains, and professional publications explain that tax-audit procedures apply where tax risk is high. It is therefore sensible to send documented explanations for substantial amounts voluntarily, without waiting for an audit. As of October 2026, open sources have not confirmed the wording of the updated Article 138.

Decree UP-100 reduced the consequences of errors for small businesses. Until 1 January 2028, such companies may correct violations identified by the tax-risk analysis system themselves. A tax audit is not conducted where the risk amount is up to UZS 500 million, and an on-site inspection is not conducted where it is up to UZS 100 million. To protect input VAT credits, accept or reject invoices within ten days, check the risk level of substantial invoices before payment, and include a contractual right to pay tax for the supplier. Document the connection between purchases and taxable supplies, including business vehicles, from the outset rather than after an inspector’s request. Make adjustments for damage, a change to exempt use and invalid invoices in the period when the adjustment arises. The PwC summary of taxes in Uzbekistan, updated on 27 August 2026, summarises the 2026 VAT changes, including credits on high-risk invoices. Ultimately, check the Tax Code in force on the transaction date.