"MUST READ-MORE NEWS"
Ok all, I decided to roll up my sleeves and do some real old fashioned digging! I've been on the phone and fax today and just finished up.
I've had a problem with this "Toshkent" sale for quite some time and decided to start there. I've had concerns over the "PO Concept" knowing the legal ramifications and the tax codes of the former Soviet States and their specific guidelines toward foriegn investors.
It appears my thoughts were correct. First, a PO will NOT DUE in this country, where a CONTRACT has to be in place before a PO will be accepted. This has to be signed and blue stamped with both companies and the bank (or both banks which may be the case), plus if it involves a "foriegn company" as defined by Uzbekistan Tax Law under Resolution No.ПП-744 of 12 December 2007 (hereinafter referred to as “Resolution 744”), which updated rates for certain taxes and obligatory payments. In this case, there WILL HAVE TO BE 2 CONTRACTS, to adequately address BOTH COUNTRIES TAXES, AND, where there is a TAX TREATY with that country, then it will be decided WHO GETS THE TAX and WHO GETS THE TAX DEDUCTION!
So I called the Uzbekistan Tax Authorities in Tashkent (+998 71 295 0820) and was referred to (+998 71 295 0058) and spoke with the Cheif Tax Prosecutor for Tashkent, Dimitri Ryoadugiun (spelling???). In addition to whats required above, the following would apply:
-1-4% Retail Tax (Uzbekistan)
-1% City Tax (Tashkent)
-18% VAT (Value Added Tax)
The Tax Authorities (for all Companies and their individual employees) are also required to provide a completed form "2-NDFL, Tax Declaration" for all business transactions AND is a fundamental requirement for ANY BANK doing business in Uzbekistan to make ANY payment!
So I asked if a 2-NDFL form was provided for Toshkent Overseas. He looked in the database and found NONE! Then I asked if a 2-NDFL form was filed for Patriot Energy" and the SAME ANSWER-NONE! Now that his interests were peaked, he asked if I had proof of a sale. Yes was my answer and I faxed him a copy of the PO that was posted and called him back.
He explained that there are SEVERAL issues with this, first, the PO HAD TO BE IN 2 LANGUAGES, with a statement of which language had legal precedent! Second, the PO would have to reference a CONTRACT NUMBER, BANK ACCOUNT NUMBER FOR PAYMENT and WITH A CERTIFIED STAMP BY THE BANK accepting the responsibility for PAYMENT, as well as the RECEIVING BANK's SWIFT/IBAN NUMBER and ACCOUNT NUMBER, then finally addressing WHO/HOW THE TAX IS ADDRESSED!
To be quite blunt, I knew this because I oversee the CSR and Socio-Economic Development for my company in Kazakhstan and Russia. In many cases, the laws are mirrored with minor differences in the CIS (former Soviet Union).
So here's what will happen now. The Uzbekistan Tax Police are going to dig into this and see about this Toshkent Overseas Sale with Patriot Energy. He has the website and this web address on how to find details on this PO. WIth his copy of the PO, he will be checking into the address and the person that signed the PO and will be demanding the tax payments that go along with it.
This only confirms what I suspected from the beginning, this whole deal is a SCAM and I've provided the numbers for you to call and check it out for yourself! You will need to say:
"Nada Pangliski Pidivochik Bezhousta" (Need and English Translator Please) for them to get an English Speaking person on the phone. Then ask for Dimitri and he's a good guy and will be glad to field you questions. I speak Russian fairly well, so I dont need one. They speak Uzbekistan and quite a bit of Russian, but they will understand what you need and I told Dima (Dimitri) there may be more calls to him.
This is such a mess folks. I hate to send bad news like this, but find it necessary to keep you all informed.
Good Luck.
PS, I will be traveling through Dubai on the 3rd and will have a 5 hour layover and WILL BE LOOKING INTO THE DUBAI COMPANY! Let you know what I find out from my Real Estate Friend who's meeting me at the airport.
AI
