Short answer: Paying a foreign company for IT services costs more than the contract amount: payments to a non-resident for services may carry a 20% withholding tax in Uzbekistan, plus currency conversion, bank paperwork and translation. Working with a local partner such as Deep Vision, an Odoo Gold Partner in Tashkent, removes most of these questions. Always confirm your specific case with your accountant.
When an owner chooses an Odoo specialist or partner from Dubai or any other country, whether Europe, Turkey, India, Russia or Kazakhstan, they usually compare the quoted amount with a local quote. But paying a foreign provider adds a layer of tax, currency and paperwork, and it often becomes visible only after the contract is signed, when the accounting team prepares the first payment. This article is not tax advice: it explains what to check with your accountant before you sign.
What taxes apply when you pay a foreign company for IT services in Uzbekistan?
Withholding tax is a tax that a company in Uzbekistan deducts from a payment to a non-resident and pays to the budget itself.
According to PwC Tax Summaries, payments to a non-resident without a permanent establishment in Uzbekistan for services, including management and consulting services, carry a domestic withholding tax of 20% (source). Odoo implementation, configuration and consulting are services too.
Uzbekistan has double tax treaties with 55 countries, and they can reduce some rates. To use them, the non-resident generally has to provide a tax residence certificate from its own country. Whether the treaty with a specific country removes withholding tax on service fees is a question for your accountant or tax adviser.
In practice: if the certificate does not arrive on time, or the treaty does not cover this type of payment, the obligation to pay the tax stays with the paying company in Uzbekistan.
Who actually bears the tax? An illustrative example
The calculation below is a hypothetical example for illustration only, not data from a real company or project. Assumptions: a service fee of US$20,000 to a foreign provider, a 20% rate, no treaty relief.
- If the contract says "US$20,000 including taxes": the provider receives US$16,000 and US$4,000 goes to the budget. The provider may not accept that.
- If the contract says "the provider receives the full US$20,000 after taxes": the tax is added on top. 20,000 / 0.8 = US$25,000, so US$5,000 of extra cost stays with you.
- Add bank commissions and the currency conversion spread; their size depends on the bank and the timing.
The same "US$20,000" quote can become 25% more expensive because of one contract clause. So before comparing a foreign quote with a local one, calculate the full cost together with your accountant.
What about VAT and e-invoices?
The VAT rate in Uzbekistan is 12% (source). E-invoicing has been mandatory since 1 January 2020 for obligated taxpayers (source).
With a local supplier the routine is familiar: the e-invoice for services arrives through the national system, documents are in Uzbek or Russian, and if both sides are VAT payers that VAT can usually be offset. A foreign provider generally does not issue documents in Uzbekistan's e-invoicing system. Whether buying services from a non-resident creates a VAT obligation for you, and how it is documented, is a separate question to settle with your accountant in advance. More: tax and VAT accounting in Odoo and e-invoices and Didox integration.
What hidden costs come with currency and bank transfers?
Paying a foreign provider usually means a foreign-currency international transfer. That adds several steps:
- converting soums into foreign currency, and the exchange rate difference;
- commissions of the sending bank and intermediary banks;
- documents the bank may request: contract, invoice, completion act;
- booking exchange rate differences in your accounts;
- repeating the whole routine for every phase payment.
In an hourly or multi-phase project these payments repeat every month, and so does the accounting team's time.
Which language will the contract and documents be in?
A foreign provider's contract, invoices and acts are often in English and sometimes under foreign law. Your accountant, bank or an inspection may need translations, which costs time and money. If a dispute arises, resolving it under another country's law is also slow and expensive.
This is not about the skill of foreign teams: a company from another country works in a different tax and legal environment, so it faces built-in disadvantages when delivering a project in Uzbekistan.
What should you check before signing with a foreign provider?
Go through these questions with your accountant:
- Does the provider have a permanent establishment in Uzbekistan, or is it a non-resident?
- Does withholding tax apply to this service, and at what rate?
- Is there a tax treaty with the provider's country, and does it cover service fees?
- Who provides the tax residence certificate, and when?
- Is the price in the contract inclusive of taxes, or "net after taxes"?
- Does the service create a VAT obligation on your side?
- In which currency do you pay, and who covers bank fees?
- Which language are the contract, invoices and acts in, and is translation needed?
- Under which country's law and in which court are disputes resolved?
General selection criteria: how to choose an Odoo partner in Uzbekistan.
Why is paying a local Odoo partner simpler?
If the provider is an Uzbek resident, the tax questions tied to non-resident payments do not arise at all. You pay in soums by local bank transfer, documents are in Uzbek or Russian, and the contract is normally governed by Uzbek law.
Deep Vision is an official Odoo Gold Partner in Tashkent; our office is at Shahrisabz street 25, office 401.
- Local company: contract, payment and closing documents are in Uzbekistan; you can ask for samples during diagnostics.
- We know the tax environment: we have ready Odoo modules for Didox (e-invoices) and Asl Belgisi, and Odoo 19 includes an Uzbekistan localization.
- Phased estimate: diagnostics first, then an estimate with a clear scope and price for each phase.
- Track record: our odoo.com page lists 7 certified experts, 20+ client references and 89% customer retention.
On cost structure: Odoo ERP pricing in Uzbekistan. Service details: Odoo implementation. To discuss your project, fill in a short brief.
Frequently asked questions
Is withholding tax on services to a non-resident always 20%?
The domestic rate is 20%, but a tax treaty and a residence certificate may reduce it. Your accountant should check your case.
Doesn't the foreign provider pay the tax itself?
Withholding tax is generally deducted and paid by the payer in Uzbekistan. The price clause in the contract decides who bears it economically.
Why is a residence certificate needed?
To apply treaty relief, the provider usually has to prove it is a tax resident of its own country.
Do these questions arise when paying a local partner?
The tax questions tied to non-resident payments do not. You pay in soums, and documents go through the national system in local languages.
Is this article tax advice?
No. It is a checklist; consult your accountant or tax adviser before deciding.
Sources
- PwC Tax Summaries: Uzbekistan withholding taxes
- PwC Tax Summaries: Uzbekistan other taxes (VAT)
- EDICOM: e-invoicing in Uzbekistan
- Deep Vision on the Odoo partner directory
To start your Odoo project under a local contract, send a request or call +998 77 093 00 07.