Uzbekistan's 0% Crypto Tax Policy Attracts Global Investors

Uzbekistan has emerged as a vibrant hub for cryptocurrency activities in Central Asia. Since 2023, local residents have been permitted to trade digital assets exclusively through locally licensed platforms. Mining pools, exchanges, depositories, and crypto-shops are all subject to a stringent permit regime. One of the most striking aspects of Uzbekistan's crypto landscape is the tax-free nature of almost every crypto transaction. Understanding the nuances of these exemptions and the types of records that the State Tax Committee (STC) and the National Agency of Perspective Projects (NAPP) can inquire into is crucial for investors, miners, and service providers to stay compliant with the regulations.

The STC is responsible for gathering national taxes and auditing entities, while the NAPP licenses and supervises all virtual-asset service providers (VASPs). The 2025 tax policy is outlined in Presidential Decree No. UP-229, which was issued in December 2024. Previous decrees, such as No. RP-3832 (July 2018) and No. RP-3926 (September 2018), legalized crypto trading and mining, exempting them from tax. NAPP Order 3380, issued in August 2022, details the licensing requirements for crypto-asset service providers (CASPs). Crypto-assets in Uzbekistan are classified as property rights and not legal tender, with tokens divided into secured and unsecured categories. The issuance of tokens is limited to sandbox projects.

Uzbekistan offers a unique tax environment for cryptocurrency activities. Capital gains from crypto disposals are currently not subject to capital gains tax. Earned income in crypto, whether through mining, staking, salaries, or airdrops, is also not taxed. Crypto trades and associated fees are exempt from value-added tax (VAT), and digital assets do not incur wealth tax, inheritance tax, or customs duty. The tax rates for individuals and businesses on qualified crypto trades are 0%, and the normal corporate profit tax of 15 to 20% does not apply to registered VASPs on their crypto-related turnover until January 1, 2028. Income and profits from licensed mining pools and solar-powered farms are tax-exempt, and the VAT zero-rating of VASP services will last until 2028.

Crypto transactions in Uzbekistan are treated favorably under the tax regime. Buying and holding crypto is not taxed, and unrealized profits are disregarded. Selling crypto to fiat or the local currency (UZS) is exempt if the trade is made using a licensed VASP. Crypto-to-crypto swaps are also exempt when carried out on a licensed exchange. Mining and staking rewards are treated as non-taxable income if the miner is registered by the NAPP. Crypto salaries and contractor fees are allowed and currently tax-free on both sides. Profits from DeFi lending and yield farming are spared if channeled through authorized wallets, but returns on DeFi offshore can be lost. The sale of NFTs on Uzbek platforms is tax-exempt, and residents can sell NFTs on foreign exchanges, but repatriation of receipts must be done via a local VASP to maintain exemption.

Despite the 0% tax rate, reporting obligations are still present. Individuals must submit a yearly Statement of Income (Form DSF-1) by April 1, which includes crypto wallet addresses, transaction amounts, and the VASP ID of the counterparty. Corporations must attach a Crypto Turnover Annexe with their profit-tax return. Licensed VASPs are obliged to store KYC profiles, blockchain logs, and order books for five years and to send quarterly transaction summaries to the STC through the “Soliq-Crypto” portal. Late filings incur an administrative charge of UZS 2 million and 0.1% interest per diem of any unpaid liability that may occur in case of an exemption lapse.

Due to the non-taxable nature of existing crypto revenue, traditional deductions are largely irrelevant. However, solar-powered miners can claim 100% of the capital cost of panels and inverters as a deduction against any business profit that is taxable in other lines. Start-ups within the NAPP regulatory sandbox can deduct R&D expenses, insurance covering against cybersecurity risks, and smart-contract verification against future taxable income when they come out of the sandbox. In the event of the crypto exemption being removed, the losses arising on a disposal will be deductible against future taxable gains, carried forward within a maximum of five years.

The STC enforces compliance through KYC requirements at VASPs, blockchain analytics data provided by the Crystal UZ tool, and Suspicious Transaction Reports (STRs) on commercial banks alerting to bulk crypto-fiat conversion. The penalty for not submitting an annual crypto statement is a fine of up to 10% of undeclared turnover. Creating KYC or using foreign exchanges that are not licensed causes an administrative offense and a temporary blocking of the wallet. Repeat offenders or individuals laundering more than UZS 5 billion face criminal prosecution, including five-year imprisonment with the digital resources confiscated. Data retention or AML violations by licensed VASPs result in license suspension and a monthly fine of 5% of the turnover of the previous year until the defects are eliminated.

The future of crypto taxation in Uzbekistan is set to evolve. The Budget Memorandum 2025 – 2027 asks the NAPP and the Ministry of Finance to develop a gradual model of phasing in taxes by the fourth quarter of 2026. Suggestions include a 3% flat capital gains tax on retail trades and a 5% corporate levy on VASP net income, which is offset by R&D credits and a 0% VAT on blockchain exports. The 0% regime will remain until a final bill passes through Parliament, but stakeholders will need to plan for the changes ahead.

Uzbekistan's 0% tax policy on cryptocurrency is unparalleled, making it a unique paradise for crypto investors and service providers. To stay compliant, it is essential to have all the necessary licensing, AML, and reporting obligations. Trading on local platforms, storing wallet logs for five years, and filing annual disclosure forms are crucial steps to avoid penalties. With legislators discussing low taxes by 2027, early planning and professional consultation will ensure that operations remain both profitable and legal in the rapidly changing Uzbek market.