For US citizens in Uzbekistan, tax compliance is defined by two key facts: a US-USSR income tax treaty from 1973 remains in force, but there is no social security totalization agreement. This combination means that while some cross-border investment income rules are simplified, self-employed Americans owe full US self-employment tax on top of any local taxes. Understanding the treaty's saving clause and the rules for foreign accounts and corporations is essential.
US filing basics every American abroad must know
US citizens and green-card holders are taxed on worldwide income wherever they live, and usually must file Form 1040 once gross income exceeds the IRS threshold ($15,750 for single filers, $31,500 for married filing jointly, and $23,625 for head of household for 2025), even when no tax is ultimately due. The tools that reduce double taxation are the Foreign Earned Income Exclusion (FEIE, up to $130,000 for 2025 under IRC §911) and the Foreign Tax Credit. Neither is automatic. The FEIE requires a tax home in a foreign country plus either the bona fide residence test or 330 full days abroad in a 12-month period, and it reaches earned income only. The Foreign Tax Credit is figured separately for each income category under IRC §904 and is capped at the US tax on the foreign income in that category, so it reduces double taxation without guaranteeing that none remains.
Two reporting rules catch most filers in Uzbekistan: the FBAR (FinCEN Form 114), required when foreign financial accounts exceed $10,000 in aggregate at any point in the year, and Form 8938 (FATCA) for specified foreign assets above the applicable threshold. Both can carry penalties even when no tax is owed. If you are behind, the Streamlined Filing Compliance Procedures are the usual path back for non-willful taxpayers. They run on two tracks: the foreign track carries no offshore penalty but requires meeting the program's non-residency test, and the domestic track carries a 5% offshore penalty but works through amended returns, so it does not fit someone who never filed at all. Tax and interest on the catch-up years are owed whichever route applies.
US tax treaty with Uzbekistan
The United States and Uzbekistan are bound by the 1973 income tax convention between the U.S. and the former Union of Soviet Socialist Republics (USSR). Article VII of the treaty contains a "saving clause," allowing the U.S. to tax its citizens as if the treaty did not exist. Consequently, while the treaty exempts certain categories of income at source, it does not generally reduce the US tax liability of an American citizen living in Uzbekistan. Note what the treaty does not contain: it is a short 1973 convention with no relief-from-double-taxation article, so the Foreign Tax Credit an American in Uzbekistan relies on comes from US domestic law under section 901, not from the treaty.
Article VII (Saving Clause).
This clause reserves the right of the United States to tax its citizens residing in Uzbekistan on their worldwide income according to its domestic laws, irrespective of most treaty provisions. This is the main reason US citizens in Uzbekistan must still file a full US tax return and cannot use the treaty to exclude income.
| Income type | Treaty rate | Statutory rate | Notes |
|---|---|---|---|
| Dividends | 30% | 30% | The 1973 US-USSR income tax treaty provides no reduction for dividends, so the US statutory rate applies. |
| Interest | 0% | 30% | The treaty exempts interest connected with US-USSR trade financing; most other US-source interest paid to a nonresident is exempt under US portfolio-interest rules. |
| Royalties | 0% | 30% | Exempt from US withholding under the 1973 US-USSR income tax treaty. |
Because of the saving clause, a US citizen in Uzbekistan cannot use the treaty exemptions (such as the 0% rate on royalties) to reduce US tax on that income. The US taxes the income at normal rates. Relief from double taxation for a US citizen here comes from the Foreign Tax Credit under section 901 of the Internal Revenue Code, which is domestic law: this 1973 convention has no relief-from-double-taxation article of its own. The credit is limited per income category under section 904 and cannot offset self-employment tax.
Uzbekistan Pensions and US Tax
Uzbekistan has a state pension system and individual accumulative pension accounts. For a US citizen, neither of these is treated as a "qualified" retirement plan by the IRS, which has significant consequences.
Employer contributions to, and earnings within, an Uzbek pension plan may be currently taxable by the US, even if they are tax-deferred in Uzbekistan. Distributions from these plans are reportable on a US tax return and are generally taxable, though the Foreign Tax Credit may offset any Uzbek tax paid.
Furthermore, these accounts are considered foreign financial assets. Their value must be included when determining if you meet the filing thresholds for:
- FinCEN Form 114 (FBAR): Required if the aggregate value of all foreign financial accounts exceeds $10,000 at any time during the year.
- IRS Form 8938 (FATCA): Required if the value of specified foreign financial assets exceeds higher thresholds (starting at $200,000 for single filers living abroad).
Depending on the structure, an Uzbek pension could be classified as a foreign trust, triggering complex reporting on Forms 3520 and 3520-A.
Investments, property, and capital gains in Uzbekistan
Investing in Uzbekistan while being a US person involves navigating complex anti-deferral tax regimes. Any investment in a local Uzbek mutual fund or similar investment vehicle is almost certainly an investment in a Passive Foreign Investment Company (PFIC). Owning a PFIC requires filing Form 8621 for each fund, and without a timely election (like a QEF or Mark-to-Market election), the default tax treatment on distributions or sale is extremely punitive.
An Uzbek business such as a Limited Liability Company (LLC) or Joint Stock Company (JSC) is a Controlled Foreign Corporation (CFC) when US shareholders in aggregate own more than 50% of it by vote or by value, counting only those US shareholders who each own 10% or more. Owning 10% makes you a US shareholder; it does not by itself make the company a CFC, because the more-than-50% test runs on the aggregate. Where the company is a CFC, a 10% US shareholder must file Form 5471, an extensive and complex information return. As a shareholder of a CFC, you may be required to pay US tax currently on the company's earnings under the Global Intangible Low-Taxed Income (GILTI) or Subpart F rules, even if you receive no distribution.
Self-employment and companies in Uzbekistan
This is a critical area for US expats in Uzbekistan. There is no US-Uzbekistan totalization agreement (also known as a social security agreement). This has one crucial consequence: a self-employed US citizen in Uzbekistan is fully liable for US self-employment taxes (Social Security and Medicare) on their net earnings from self-employment.
The tax applies once net earnings from self-employment are $400 or more, and it is computed on 92.35% of net earnings rather than on the whole figure. Of the 15.3% combined rate, the 12.4% Social Security portion stops once that computed base reaches the annual wage base ($176,100 for 2025, $184,500 for 2026); the 2.9% Medicare portion keeps running with no ceiling, and a further 0.9% Additional Medicare Tax applies to combined Medicare-taxed wages and self-employment income above $200,000 for a single, head-of-household or qualifying-surviving-spouse filer, $250,000 for a joint return, and $125,000 for married filing separately. This tax is owed to the IRS regardless of any income or social taxes paid to Uzbekistan, and the Foreign Tax Credit cannot be used against it. You cannot obtain a Certificate of Coverage to claim an exemption. Furthermore, the Foreign Earned Income Exclusion (FEIE) can reduce your income tax, but it does not reduce your self-employment income for the purpose of calculating self-employment tax.
Worked examples
Self-employed IT consultant in Tashkent (2025)
Maria is a US citizen working as a freelance IT consultant in Tashkent. She earns $120,000 in net self-employment income. Because there is no totalization agreement with Uzbekistan, Maria owes US self-employment tax. Her net earnings from self-employment for US tax purposes are $120,000 * 0.9235 = $110,820. That sits below the 2025 Social Security wage base of $176,100, so the full 15.3% applies and she owes $16,956 in US SE tax. Had the base exceeded $176,100, only the 2.9% Medicare portion would have continued above it. The SE tax stands even if she has a tax home in Uzbekistan, meets the bona fide residence or 330-day physical presence test, and uses the Foreign Earned Income Exclusion to exclude all $120,000 from US income tax. The SE tax must be paid. She will also need to file an FBAR for her Uzbek bank accounts.
Salaried employee at an Uzbek company (2025)
John works for an Uzbek textile company and earns a salary equivalent to $90,000. If his tax home is in Uzbekistan and he meets either the bona fide residence test or the 330-day physical presence test, he can use the Foreign Earned Income Exclusion (FEIE) to exclude his entire salary from US income tax, which takes his US income tax on that salary to zero. Both conditions are required, not just the fact that his salary is under the cap, and he must still file a US tax return and Form 2555 to claim the exclusion. He also has over $10,000 combined in his Uzbek bank account and his individual accumulative pension account, so he must file a FinCEN Form 114 (FBAR) to report these accounts to the US Treasury. If his account balances are high enough (e.g., over $200,000), he may also need to file Form 8938 with his tax return.
Retiree with US-source investments (2025)
David is a retired US citizen living in Uzbekistan. He receives $30,000 in dividends from his US brokerage account. The 1973 US-USSR treaty has no dividends article, so it provides no reduction; a nonresident would face the 30% US statutory rate. As a US citizen, David is taxed under US domestic law regardless of the treaty (the saving clause). He reports the $30,000 on his Form 1040 and pays US tax at the qualified dividend rates (0%, 15%, or 20%). His US broker generally will not withhold on a US citizen, but the tax is due when he files.
Common mistakes for Americans in Uzbekistan
- Believing there is a totalization agreement and that they are exempt from US self-employment tax. They are not.
- Using the Foreign Earned Income Exclusion (FEIE) and thinking it eliminates the need to pay US self-employment tax.
- Assuming the US-USSR treaty exemptions (which cover royalties and certain trade-related interest, not dividends) mean a US citizen owes no US tax on US-source income; the saving clause lets the US tax its citizens in full.
- Failing to file FinCEN Form 114 (FBAR) for Uzbek bank and pension accounts exceeding the $10,000 aggregate threshold.
- Ignoring the high probability that investments in Uzbek mutual funds are PFICs, which require filing Form 8621.
- Not checking whether US shareholders together hold more than 50% of a local Uzbek company (LLC or JSC) by vote or value, which is what makes it a CFC and triggers a complex Form 5471 filing.
- Thinking the saving clause in the treaty is a minor detail, when in fact it preserves the US's right to tax its citizens on worldwide income.
- Assuming an Uzbek pension plan is a 'qualified' plan like a 401(k), and failing to report contributions or growth as potentially taxable by the US.
Uzbekistan tax FAQ
As a self-employed American in Uzbekistan, do I have to pay US Social Security and Medicare taxes?
Yes. There is no US-Uzbekistan totalization agreement. Self-employment tax applies once net earnings from self-employment are $400 or more, and it is computed on 92.35% of those net earnings: 12.4% for Social Security up to the annual wage base ($176,100 for 2025) and 2.9% for Medicare with no ceiling, 15.3% combined below the base. It is owed in addition to any income tax you pay to the US or Uzbekistan. The Foreign Earned Income Exclusion does not reduce it and the Foreign Tax Credit cannot offset it.
Does the US-Uzbekistan tax treaty lower my US taxes?
Generally, no. The treaty contains a "saving clause" in Article VII that allows the US to tax its citizens as if the treaty did not exist. It exempts certain income at source, mainly royalties and interest tied to US-Uzbekistan trade financing, but for a US citizen the saving clause takes those benefits back. The Foreign Tax Credit you use for Uzbek tax comes from section 901 of the Internal Revenue Code rather than from this treaty, which has no relief-from-double-taxation article.
Do I need to report my Uzbek bank account to the US?
Yes, most likely. If the total, combined value of all your foreign financial accounts (including bank, brokerage, and pension accounts in Uzbekistan and elsewhere) exceeds $10,000 at any point during the year, you must file a FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Higher thresholds may also trigger a requirement to file IRS Form 8938.
What happens if I own an Uzbek company?
Owning 10% or more by vote or value makes you a US shareholder, but the company is only a Controlled Foreign Corporation (CFC) if US shareholders each holding 10% or more together own more than 50% of it by vote or by value. Where that aggregate test is met, you file the complex Form 5471 each year and may owe US tax on the company's profits under the Subpart F or GILTI rules even if nothing is distributed to you.
Is my Uzbek pension treated like a US 401(k) for tax purposes?
No. The IRS does not consider Uzbek pension plans to be "qualified" retirement plans. This means employer contributions, employee contributions, and internal growth may be currently taxable by the US. The account is also a reportable foreign financial asset for FBAR and Form 8938 purposes.
Does the US-USSR treaty exempt my US-source dividends?
No. The 1973 US-USSR treaty has no dividends article, so it provides no reduction; US-source dividends paid to a nonresident face the 30% statutory rate. The treaty exempts only royalties and certain trade-related interest. As a US citizen, you are taxed on your worldwide income, including US-source dividends, under US domestic law regardless of the treaty (the saving clause).
What is a PFIC and should I be concerned in Uzbekistan?
A PFIC is a Passive Foreign Investment Company. If you invest in a non-US investment fund, like an Uzbek mutual fund, it is almost certainly a PFIC. Owning a PFIC requires filing Form 8621 and can lead to very high US tax rates unless you make specific, timely elections. It is a major compliance trap for US investors abroad.
Can I get a Certificate of Coverage to avoid double social security taxes?
No. Certificates of Coverage are issued only for countries that have a social security totalization agreement with the United States. Since Uzbekistan does not have such an agreement, you cannot use a Certificate of Coverage to get an exemption from US self-employment tax.
Sources and last reviewed
- IRS, Uzbekistan Tax Treaty Documents (verified 2026-06-07)
- U.S. Treasury, U.S.-USSR Tax Convention Text (verified 2026-06-07)
- U.S. Embassy in Uzbekistan, Internal Revenue Service (U.S. Taxes) (verified 2026-06-07)
- U.S. Department of State, 2025 Uzbekistan Investment Climate Statement (verified 2026-06-07)
Reviewed by Ilya Fayerman, Esq. (NY Bar) on
Common services needed by expats in Uzbekistan
Most Americans abroad in Uzbekistan need help with at least one of the following core compliance areas, which frequently interact:
- US expat tax returns, Form 1040 with FEIE, FTC, treaty positions, and any required state returns.
- FBAR reporting, FinCEN Form 114 for foreign financial accounts exceeding $10,000 aggregate at any time during the year.
- Form 8938 (FATCA), IRS disclosure of specified foreign financial assets when thresholds are met.
- Streamlined catch-up filing, For eligible non-willful taxpayers with prior unfiled years.
Discuss your Uzbekistan return