The 1% rate is the main advantage of self-employment in 2026. But it applies only within the limit: 1 billion UZS of total income from selling goods and services per tax period, that is, per calendar year (Article 461 of the Tax Code as amended by Law No. ZRU-1108, Presidential Resolution No. PP-247).
1. What counts toward the limit
The limit covers all sales income for the year, whatever the source:
- payouts from companies where the client withheld the tax as tax agent;
- income via digital platforms of payment organisations, such as taxi and delivery services or marketplaces;
- payments directly from individuals.
As a guide, 1 billion UZS a year is about 83 million UZS a month on average. If you work with several clients, each sees only their own share, so you need to track the total yourself.
2. What happens when the limit is exceeded
From the day total annual income exceeds 1 billion UZS, the self-employed person must switch to value added tax and profit tax. From then on they pay taxes under the procedure for sole proprietors, except for social tax.
| Up to 1 billion UZS | From the day of exceeding | |
|---|---|---|
| Tax | 1% turnover tax | 12% VAT and 15% profit tax |
| Who pays on company payouts | the company as tax agent | the taxpayer |
| E-invoice | without VAT | with VAT |
| Reporting | handled by the tax agent | self-filed, like a sole proprietor |
Services that withhold tax as tax agents stop withholding 1% once the limit is exceeded: from then on the taxpayer settles with the budget directly.
3. Special cases
Newly registered self-employed
The rule for newly registered sole proprietors now also applies to newly registered self-employed people: if income in the year of registration exceeds 1 billion UZS, VAT and profit tax are also paid in the following year.
Voluntary switch
A self-employed person may switch to VAT and profit tax voluntarily without waiting to exceed the limit. This makes sense, for example, if key clients work with VAT and want to offset it.
Imports
From 2026 the mandatory VAT payment on imported goods also applies to the self-employed.
4. How not to miss the moment
- Track all receipts by month, not only payouts from your largest client.
- When you approach 850 – 900 million UZS, warn clients in advance about a possible change of tax regime.
- Notify the client on the day you exceed the limit: this is usually required by the contract.
- From that day, issue e-invoices with VAT and file reports yourself.
For companies: if a contractor reports exceeding the limit, further payouts cannot be processed as self-employed payouts with 1% withheld. Update the contract and accept e-invoices with VAT.
This material is for reference and reflects the legislation of the Republic of Uzbekistan as of October 2026. Before acting on a specific situation, check the current wording of the acts on lex.uz or consult a tax adviser.