Despite being blocked in Uzbekistan since the summer of 2021, TikTok has now been included in the country's tax accounting. The popular social media platform will be subject to a 12% value-added tax (VAT) on the payment for its services.
According to the data from the Tax Committee, TikTok PTE LTD (Singapore) registered as a VAT payer in Uzbekistan on October 5, making it the 55th foreign company to do so in the country. As a result, TikTok's services will now be subject to the 12% VAT.
It is worth noting that since July 2021, TikTok has been listed as a violator of the law "On Personal Data" in Uzbekistan. This law requires companies to process the personal data of Uzbek citizens within the country by hosting servers locally. Social media platforms such as Twitter, VKontakte, and WeChat were also on the list but were removed in August 2022, leaving TikTok as the sole platform.
In March 2022, Uzbekistan's Minister of Digital Technologies, Sherzod Shermatov, held an online meeting with TikTok's Vice President, Theo Bertram, to discuss issues related to the security of personal information of TikTok users in Uzbekistan and compliance with local legislation. During the meeting, the minister proposed that TikTok open a representative office in the country.
No restrictions were imposed on numerous other platforms processing Uzbek data. However, in November 2021, popular platforms like Telegram, Facebook, Odnoklassniki, and YouTube faced a temporary block in the country, which triggered a public outcry. The restrictions were swiftly lifted after a few hours, and the incident led to the resignation of the head of Uzkomnazorat, the Minister of ICT, and the Prime Minister's IT adviser.
The TikTok application faced criticism in 2021 when the Ministry of Culture labelled it as "harmful," and two political parties called for its ban in the country. However, former Minister of Justice Ruslanbek Davletov and former Khokim of Tashkent Jahongir Artykkhodjayev defended TikTok and other social networks during that time.
In recent months, 40 foreign companies registered as VAT payers have paid €44.8 bn (UZS 575.45 bn) in taxes. From January to April this year alone, 42 companies paid €2.52 mn (UZS 32.4 bn) The implementation of the so-called "Google tax" is mandated by the new version of the Tax Code, which was enacted on January 1, 2020. Following this, the State Tax Service established a dedicated VAT office to facilitate the registration of foreign Internet companies as taxpayers.
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