Tax Alert: 17 April 2012

Presidential Decree No.ПП-1731 of 26 March 2012 

Presidential Decree No.ПП-1731 “On additional measures on stimulation of exporting entities and expansion of export of competitive products” (Decree-1731) was issued on 26 March 2012. The following is an unofficial translation of some of its provisions.
Uzbek companies producing goods (works/services) will have a right to: 

  • participate in international tenders for projects undertaken in the Republic of Uzbekistan with financing by international financial institutions, donor countries, governments of foreign countries and other non-residents on conditions equal to those stipulated for foreign participants, including the condition for contracting in foreign currency for the supply of goods (works, services) – PwC comment: We understand that this provision is intended to allow Uzbek companies that win the qualifying tenders to bill and receive settlement for their goods/works/services in foreign currency; however, further guidance will likely follow to clarify criteria that will need to be met by the projects to allow payments in foreign currencies; 
  • conclude direct contracts in foreign currency with non-residents for the supply of goods (works, services) of own production to be used on the territory of the Republic of Uzbekistan – PwC comment: We understand that this provision is intended to allow Uzbek companies to sell goods/works/services to non-residents for foreign currency even though such goods/works/services would be consumed in Uzbekistan.

Presidential Resolution of 10 April 2012 

Presidential Resolution “On additional measures on attraction of foreign direct investments” was issued on 10 April 2012. According to the Resolution, newly established enterprises with foreign investments, where contribution of the foreign investor in the form of cash constitutes not less than 5 million US Dollars (USD), shall have the right to “stabilise” their tax regime on a number of taxes for 10 years as of the date of their state registration.

Presidential Resolution of 13 April 2012 

New free industrial zone “Angren” is to be created in Tashkent region (FIZ “Angren”) for a preliminary term of 30 years with potential prolongation. During that period special customs and tax regimes will be in force within its territory.