of October 6, 2021 No. UP-6319
About measures for further stimulation of exploration works and enhancement of procedure for the taxation of subsoil users
For the purpose of industrial development of mineral deposits with broad attraction of foreign investments, stimulations of exploration works with the help of modern methods and technologies, and also further enhancement of procedure for the taxation of subsoil users:
1. Determine that since January 1, 2022 the special procedure for exposure to the competitive biddings of right to use by the subsoil plot for geological studying or production on earlier reconnoitered subsoil plot of hydrocarbons, precious, non-ferrous, rare and radioactive metals and other types of objects of the ore minerals having essential business potential is established. At the same time:
the sales amount is considered as the bonus amount for mineral right and is transferred into the republican budget of the Republic of Uzbekistan less expenses of organizers of the competitive biddings;
organizers or participants of the competitive biddings have the right to offer the increased size of the tax rates on separate types of tax in case of production (extraction) of minerals according to the procedure established by the legislation.
2. Agree with the offer of the Ministry of Finance, Ministry of Economic Development and reducing poverty and the State committee on geology and mineral resources on cancellation since January 1, 2022 of bonus of the commercial detection levied for the right of mining, and also the subscription bonus levied for the right of implementation of activities for search and investigation of minerals.
3. Determine that since January 1, 2022:
a) the parcels of land which are taken away for carrying out exploration and (or) prospecting works are not the taxation object the land tax from legal entities;
b) the annual royalty for use of natural resources for geological studying estimated proceeding from the reserved space and types of minerals in the sizes established by acts of the legislation is entered;
c) the annual royalty for use of natural resources for geological studying goes:
70 percent - in the republican budget of the Republic of Uzbekistan;
15 percent - in local budgets of areas;
15 percent - in local budgets of areas (cities).
4. Exempt the legal entities who are carrying out exploration works, and also the contract and subcontract organizations attracted with them from:
periodical customs payments in case of temporary import of the special equipment necessary for implementation of exploration works, for search, investigation and development of fields;
customs duty when importing not made in the Republic of Uzbekistan of the equipment, material resources and the special equipment necessary for work on search, investigation and development of fields in the lists created in accordance with the established procedure.
Extend the privileges provided by the paragraph third item 4 of the Presidential decree of the Republic of Uzbekistan of April 28, 2000 No. UP-2598 "About Measures for Attraction of Direct Foreign Investments in Exploration and Production of Oil and Gas" for the domestic enterprises performing search and investigation of fields of hydrocarbons in the territory of the Republic of Uzbekistan.
Determine that compensation of tax amount on value added to the legal entities who are carrying out exploration works is made according to the procedure, established by the Tax code of the Republic of Uzbekistan, but no later than 30 days from the date of filing of application.
5. Determine that since October 1, 2021:
in case of realization of natural gas for export the rate of the excise tax is established in the amount of zero percent;
in case of natural gas import on the territory of the Republic of Uzbekistan legal entities are exempted from customs duty.
6. To the state committee on geology and mineral resources, Agency on management of the state assets, the Ministry of Economic Development and reducing poverty, the Ministry of Finance, the State Tax Committee in three-months time to bring into accord with this Decree approval procedure on right to use by the subsoil plot, taking into account carrying out the competitive biddings and determination of original cost of the right to use by the subsoil plot exposed on the competitive biddings, with provision to organizers or participants of the competitive biddings of the right to offer the increased size of the tax rates on separate types of tax.
7. To the Ministry of Finance together with the State Tax Committee, the State committee on geology and mineral resources and other interested ministries and departments till December 1, 2021 to introduce the bill "About Modification and Amendments in the Tax Code of the Republic of Uzbekistan" to the Cabinet of Ministers, providing since January 1, 2022:
decrease in tax rates for use of natural resources on oil and natural gas to 10 percent, to gold and copper - to 7 percent, to tungsten - to percent 2,7, to uranium - to 8 percent. At the same time for the companies with the state share performing hydrocarbon production, precious, non-ferrous, rare and radioactive metals and also within production sharing agreements (if other procedure is not provided by the agreements and agreements which became effective till September 1, 2021) by the President of the Republic of Uzbekistan the raised tax rates for use of natural resources can be established;
introduction of tax on investment income for the subsoil users performing production (extraction) of oil, natural gas, gas condensate, precious, non-ferrous, rare and radioactive metals on new fields taking into account capital expenditures of subsoil users;
tax exemption on property of legal entities of new oil and gas wells in the first two years, since month of their input in operation, in the next three years - application of the tax rate on property of legal entities lowered by 50 percent from the established tax rate;
further enhancement of procedure for calculation of tax for use of natural resources taking into account the best foreign practices and involvement of experts. At the same time to determine that in case of calculation of tax for use of natural resources in case of oil extraction, natural gas and separate types of minerals during the period from January 1 to December 31, 2021 the tax base decreases by expense amount, connected with their transportation and conversion;
unification of tax rates for use of natural resources on nonmetallic minerals;
provision of the right of conducting tax accounting in US dollars to the companies with foreign investments - to taxpayers of tax on investment income.
8. To the state committee on geology and mineral resources, the Ministry of Finance, the State Tax Committee to provide in the new edition of the bill of the Republic of Uzbekistan "About subsoil" the procedure following from this Decree.
9. To the Ministry of Finance, the Ministry of Economic Development and reducings poverty, to the State committee on geology and mineral resources together with the interested ministries and departments in three-months time to make in the Cabinet of Ministers offers on the changes and amendments in acts of the legislation following from this Decree.
10. To impose control of execution of this Decree on the Prime Minister of the Republic of Uzbekistan A. N. Aripov.
President of the Republic of Uzbekistan
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