Uzbekistan "Second Chance" Tax Amnesty 2026: Penalty Write-Off by 31.12.2026, Liquidation or Suspension of a Business

As of November 2026, the "Second Chance" tax amnesty under Presidential Decree No. UP-175 of 27 August 2026 (in force from 28 August 2026) lets small and medium-sized businesses in Uzbekistan have late-payment penalties (peni) written off, provided they pay the underlying tax debt in full (excluding penalties) by 31 December 2026 and have no tax arrears other than penalties on 1 January 2027. Related enforcement proceedings are terminated. Separately, from 1 January 2027 an application to terminate or suspend a business must state the reason. For owners thinking of closing a company, this changes the arithmetic: first decide whether to pay under the amnesty or liquidate, then choose between liquidation, suspension and the dormant-company regime.

In brief

• What is written off. Penalties on tax debt that arose before the amnesty was declared, if the debt other than penalties is paid in full by 31.12.2026 (Decree UP-175, para. 7(a)). The taxes themselves and fines on other grounds are not cancelled.
• The key condition. On 01.01.2027 the business must have no tax arrears other than penalties (para. 7(v)). Leaving even part of the debt unpaid forfeits the write-off.
• Reason for closing. From 01.01.2027 the application to terminate or suspend activity states the reasons, and the registration system analyses them automatically (paras. 5-6). The Ministry of Justice has three months to build this function.
• Suspension on application. Law No. ZRU-1168 of 17.08.2026 introduces suspension of business activity at the entrepreneur's own request; lex.uz shows an entry-into-force date of 18.11.2026, and the Cabinet of Ministers must approve the procedure.
• Liquidating an LLC. It follows the Regulation to Cabinet of Ministers Resolution No. 704 of 21.08.2019 and Article 66 of the new LLC Law (ZRU-1137, in force since 22.07.2026). The maximum period is 6 months from notification of the registrar; for the amnesty what matters is not finishing liquidation by 31.12.2026 but paying the debt by that date.
• Who decides. Write-off of penalties and the outcome of liquidation are decided by the tax service and the registration authority; we do not promise a result.

What was adopted: Decree UP-175

Decree of the President of the Republic of Uzbekistan No. UP-175 of 27.08.2026 "On measures to implement the tasks set at the VI open dialogue of the President with entrepreneurs" entered into force on 28.08.2026 (text on lex.uz). Three blocks matter for this article: para. 7 (the amnesty), paras. 5-6 (reasons for closing) and para. 1 (exceptions to the inspections moratorium).

The "Second Chance" economic amnesty (para. 7)

The amnesty is declared for small and medium-sized businesses and runs until 31 December 2026. The Decree does not define "small" or "medium". From 18.11.2026, Article 5 of the Law on guarantees of freedom of entrepreneurial activity as amended by ZRU-1168 classes individual entrepreneurs, micro-firms and small enterprises with total annual income up to UZS 10 billion as small business, and those with UZS 10-100 billion as medium; if you are near the line, check your status before paying. A taxpayer gets (sub-paragraph letters follow the Russian text: a, b, v, g, d, zh, z):

• Write-off of penalties (para. 7(a)). If tax debt (excluding penalties) that arose before the amnesty was declared is paid in full by 31.12.2026, the penalties accrued on it are written off and related enforcement proceedings are terminated.
• The condition (para. 7(v)). This applies only if there is no tax debt (excluding penalties) on 01.01.2027. A "partial" payment does not settle the matter.
• Self-correction (para. 7(b)). If you correct previously filed returns yourself and pay the additional tax in full by 31.12.2026, no penalties accrue on that amount.
• Payment order (para. 7(g)). Exemption from administrative liability for failing to submit to the bank a payment order for taxes and charges.
• Sustainability rating (para. 7(d)). Points in the Business Sustainability Rating are not reduced for those who correct their own errors under the amnesty.
• Fines that arose before 01.01.2026 (para. 7(zh)). The unpaid part of administrative fines for late tax reporting and the unpaid part of financial fines for fixed-amount turnover-tax payers are written off.
• Employment contracts (para. 7(z)). Previously concluded employment contracts can be entered in the Unified National Labour System without a late-filing fine.

The Decree contains no date of "declaration" of the amnesty (a working reference point is its entry into force on 28.08.2026) and no application procedure for the write-off; we do not name forms or review periods until they are published. Nor does it define "tax debt"; under Article 55 of the Tax Code, tax debt means taxes not paid on time, financial sanctions and penalties. The Decree carves out only penalties from the condition, so it is safer to pay unpaid financial sanctions together with the tax (except those written off under para. 7(zh)). Under Article 55 a payment is applied first to tax, then to penalties and only then to fines.

Reason for closing or suspending (paras. 5-6)

From 1 January 2027 a system of continuous study of the reasons and factors behind the termination and suspension of business activity is introduced. The application to terminate or suspend must state the reasons, and the Automated System for State Registration and Registration of Business Entities will analyse them automatically. The Ministry of Justice must create these capabilities within three months (para. 6); the text does not say from which date the period runs.

The Decree introduces a duty to state a reason and automatic analysis; it does not say that the reason affects the right to close or the registrar's decision. The list of permissible reasons has not been disclosed. State the reason honestly and consistently with your documents: a mismatch with your reporting invites extra questions.

Inspections during liquidation (para. 1)

The Decree introduces a three-year moratorium on inspections of small businesses, with exceptions. These include inspections carried out in connection with the liquidation of a business entity. So the moratorium will not protect you from a tax inspection during liquidation.

Who benefits from the amnesty and who does not

The amnesty saves money where penalties are a noticeable part of the debt and you can pay the principal before year-end. The calculation is simple: compare accrued and expected penalties with the amount you must pay by 31.12.2026.

The amnesty is not suitable if you are not a small or medium business, cannot pay the principal by year-end, or the debt is not a tax debt.

Pay and stay, or close

• Does the business have a future? If there is or will be revenue in the next 6-12 months, the amnesty is almost always worth it: you keep the company, licences, contracts and history.
• Are the company's assets and the participants' funds enough to settle with creditors? If not, voluntary liquidation will not work (Regulation No. 704 does not apply to organisations showing signs of insolvency); an insolvency procedure is needed.
• How much does keeping the company cost? The accounting and risk of a "sleeping" company sometimes cost more than a one-off liquidation.

The amnesty and liquidation do not exclude each other. Closing does not "erase" penalties: the debt must be settled before the liquidation balance sheet, and the inspections moratorium does not cover liquidation (Decree, para. 1). If you have decided to close, the amnesty makes it cheaper.

Closing a business: three routes

1. Voluntary liquidation of an LLC

The procedure is covered in our article on liquidating a company in Uzbekistan; in short, under the Regulation to Cabinet of Ministers Resolution No. 704 of 21.08.2019 (in the version shown on lex.uz as of 15.10.2026) and Article 66 of Law ZRU-1137:

• the general meeting of participants decides on liquidation and appoints a liquidator (a sole participant decides alone);
• the liquidator sends a copy of the decision to the registration authority and the banks no later than the next working day; from that notification penalties on taxes stop accruing (para. 18) and dividends may not be declared;
• creditors get at least two months to file claims;
• the tax inspection starts within 3 working days and lasts no more than 30 calendar days; it is not held for some companies (no activity and no debts; revenue up to UZS 10 billion over three years at low risk, etc., para. 21);
• the whole process takes no more than 6 months from notification of the registrar; if the documents are not fully filed in that time, voluntary liquidation is terminated, bank accounts are restored and the relief of para. 18 no longer applies: penalties and suspended taxes are collected in full for the whole period (paras. 38-39).

The key point for our topic: starting liquidation stops new penalties from accruing but does not write off those already accrued. The liquidation balance sheet is drawn up after taxes and financial sanctions are paid (para. 31 of the Regulation), and the liquidation entry is made only with the tax authority's conclusion that there is no debt (paras. 32, 36). Under Article 55 of the Tax Code penalties are part of tax debt, so previously accrued penalties must be paid; the amnesty, until year-end, lets you avoid that. Confirm the exact procedure for your case with the tax authority.

From 01.01.2027 the application must state a reason; liquidation deadlines and documents stay the same, and the amnesty will have ended by then.

2. Suspension on application (ZRU-1168)

Law No. ZRU-1168 of 17.08.2026 added Article 42¹ to the Law "On guarantees of freedom of entrepreneurial activity": a business entity's activity may be suspended (a) at its own request, (b) by control bodies for no more than ten working days, only on factors from the Register of factors posing a high threat to human life and health, (c) by a court for more than ten working days but no more than six months.

If the rule works as written, suspension on application gives you:

• the application is filed with the registration authority or through the automated state registration system; the data go to the tax authorities by the end of the next working day;
• suspension is a ground to suspend the filing of tax and statistical reports and the calculation of taxes for the entity itself and each employee;
• resumption is also made by application.

What is still missing is the procedure for suspension at one's own request. The Cabinet of Ministers must approve it within three months of the law's publication (Art. 6), and the law itself, per lex.uz, enters into force on 18.11.2026 (Art. 7: three months after publication). The maximum length of suspension on application and the fate of existing debt are not in the text. Suspension does not write off debt: the law speaks of calculating taxes, not of forgiving accumulated arrears. Debts for past periods must still be settled, and the amnesty until 31.12.2026 remains the cheapest way to remove penalties.

3. Dormant regime and removal from the register

For companies that do not actually operate there is a separate procedure: the Regulation on removal from the state register of business entities not carrying out financial and economic activity (Annex 2 to Resolution No. 704) and Article 66 of the new LLC Law. The tax authority first offers the participants voluntary liquidation; if it is not started within 10 working days, the participants refuse or cannot be found, and there are no tax debts and no property, it sends the registrar a proposal to move the company to the dormant (inactive) state (paras. 8-9). If activity is not restored within a year, the registrar removes the company from the register; no liquidator is appointed unless the company has a state share (Article 66, parts 6-7, of Law ZRU-1137). This is what is called "simplified liquidation".

Pitfalls: the procedure is started by the tax authority, not by you; it does not suit a company with debts or property; remaining cash on the accounts of a removed company and tax overpayments go to the local budget. What the new LLC law changes in the charter and shareholders' agreement is covered in the 2026 LLC Law article.

Comparing the options

Calendar: what to do and when

Step-by-step plan for an owner with a debt

• Reconciliation. Request a statement of settlements with the budget and split the balance into tax, penalties and fines: everything except penalties must be paid.
• Status. Make sure you are a small or medium enterprise: the Decree has no criteria.
• Corrections. Correct known errors in returns and pay the difference by 31.12.2026: no penalties accrue on that amount.
• Payment. Pay the principal in full; a partial payment does not create a right to a write-off.
• Check on 01.01.2027. Request a reconciliation: penalties written off, debt other than penalties at zero, enforcement proceedings terminated.
• Decision on the company. Closing means liquidation; if you need a pause, wait for the suspension procedure.

Common mistakes

• Thinking closure erases debt. A tax inspection takes place in liquidation, the moratorium does not apply to it, and the debt of a removed company is collected.
• Guessing the reason in the application. From 2027 reasons are analysed automatically; the wording must match the facts.
• Forgetting an arrest on the account. The account cannot be closed until the arrest is lifted; confirm termination of enforcement proceedings under the amnesty with documents.

How Pactum helps

• We analyse your position from documents: reconciliation statement, debt structure, business size, and tell you frankly whether the amnesty or liquidation pays off.
• We prepare and run LLC liquidation: participants' decision, notices, tax inspection, balance sheet, removal from the register.
• We support the tax inspection and reconciliation and prepare self-corrections of returns.
• We prepare the suspension or liquidation application with a well-founded reason.

Liquidation of a legal entity starts from UZS 5,000,000, support for tax inspections from UZS 4,000,000; third-party costs (notary, archive, appraiser, if needed) are paid separately. The write-off of penalties, the result of the inspection and the liquidation entry are decided by the tax service and the registration authority, and we do not promise a result. Start with a lawyer consultation: 60 minutes, UZS 300,000, credited toward the cost of the service. Phone +998 78 113 81 01, Telegram, info@pactum.uz, office: Tashkent, Afrosiyob St., 21.

Frequently asked questions

Will penalties be written off if I pay only part of the debt?

No. Penalties are written off only if tax debt (excluding penalties) that arose before the amnesty was declared is paid in full by 31.12.2026, and only if there is no such debt on 01.01.2027 (Decree UP-175, para. 7(a), (v)).

Who can take part in the "Second Chance" amnesty?

Small and medium-sized businesses, until 31.12.2026. The Decree gives no criteria; from 18.11.2026 Article 5 of the Law on guarantees as amended by ZRU-1168 treats annual income up to UZS 10 billion as small business and UZS 10-100 billion as medium.

Do I need to file an application for the penalties to be written off?

The Decree text does not impose a duty to apply: it says that on full payment penalties are written off and proceedings terminated, and under para. 32 state bodies apply its rules directly without waiting for secondary legislation. The tax service may clarify the procedure separately, so after paying, ask for a reconciliation and written confirmation. We do not name forms or review periods until they are published.

Must a reason be stated in a liquidation application already now?

No, only from 01.01.2027. Before that date the Decree does not impose a duty to state a reason in the application; the Ministry of Justice must build the function within three months (paras. 5-6). The participants' liquidation decision under Regulation No. 704 already includes a reason, but that is a different document.

Can an LLC with tax debt be liquidated?

Yes, if the property and the participants' funds are enough to settle: first employees' claims and claims for harm to life and health, then payments to the budget, then other creditors (para. 24 of Regulation No. 704). If creditors' claims cannot be fully satisfied, the liquidator must apply to the economic court (para. 30). Before the liquidation entry, the tax authority's conclusion that there is no debt is required (paras. 32, 36).

How does suspension differ from liquidation?

Suspension under ZRU-1168 is temporary: the company stays in the register, taxes and reporting are suspended, and resumption is made by application. Liquidation ends the company without succession. The Cabinet of Ministers is to approve the procedure for suspension on application; as of 09.11.2026 we did not find its text.

What is "simplified liquidation" of a dormant LLC?

It is not a separate simplified procedure on the participants' application but the procedure under Annex 2 to Resolution No. 704 and Article 66 of Law ZRU-1137: the tax authority sends the registrar a proposal for the dormant regime, and if activity is not restored within a year, the company is removed from the register. It is possible only without tax debts and property.

Sources

• Presidential Decree UP-175 of 27.08.2026, paras. 1, 5-7, 32 (Russian text); Uzbek original (PF-175)
• Tax Code, Article 55 "Tax debt" (Russian text)
• Law ZRU-1137 of 21.04.2026 "On limited liability companies", Arts. 66, 68
• Law ZRU-1168 of 17.08.2026, Art. 1 paras. 2 and 17 (Arts. 5 and 42¹ of the Law on guarantees of freedom of entrepreneurial activity), Arts. 6-7
• Cabinet of Ministers Resolution No. 704 of 21.08.2019 with annexes (Uzbek text)
• Cabinet of Ministers Resolution No. 704 of 21.08.2019 (document card)