The visit was organized by the joint project of the Ministry of Finance of the Republic of Uzbekistan and the United Nations Development Programme, “Public Finance Reform in Uzbekistan”.

Within the framework of his mission, the international consultant held a set of trainings at the conference-hall of “Grand Mir” hotel for the employees of the Ministry of Finance, State Tax Committee (STC) and the experts in the area of taxation, on the purpose, concept, and application of international tax treaties, as well as their interpretation based on an in-depth analysis of the specific criteria and identification mechanisms implied by the permanent institutions.

The participants were familiarized in a great detail with the typical methods and approaches to taxation of income from immovable property and capital gains, dividends, royalty and interest, employment income and income from independent personal services, as well as taxation of electronic commerce. In addition, Mr. Luthi emphasized the measures on the elimination of double taxation, prevention of international tax avoidance, and international collaboration in terms of information exchange and collection.

Flaws in implementation of international tax agreements adversely impact attractiveness of the local economy for foreign investors, affect private sector development, investments, and employment. Therefore, the information on application of international tax treaties, obtained during the training, as well as the recommendations, developed within the mission framework will be used in improving national legislation on the application of tax treaties, and will be considered in the regulation of permanent institutions and the system of tax treaties administration, and in further improvement of information exchange process in the taxation area.

It is necessary to note, that during the first phase of the mission in April, 2009, Mr. Luthi held a series of meetings with the officials of the Ministry of Finance, State Tax Committee (STC) of the Republic of Uzbekistan and representatives of taxpayers on the implementation issues of international agreements on avoiding double taxation, and improvement of national tax legislation in the area of taxation of non-residents.

Over the course of the trainings held within the first phase, the international consultant uncovered issues of defining residence basis for establishment of permanent base and its tax accounting, identification of the facts of intentionally decreased reporting of tax liabilities, methods of identifying the value of separate components of agreements between residents and non-residents, taxation of revenues from services and royalty, revenues of physical entities, as well as the basic principles of implementing international agreements in the area of taxation. In addition, tendencies of international tax development and acceptance of preventive measures to face future challenges in the area were discussed. In addition, the training needs of the employees of the STC and the Ministry of Finance were identified and analyzed.

Mr. Daniel Luthi possesses a vast experience in the area of international taxation. He led the Department on international taxation of the Tax Administration of Switzerland, was the chairman of the working group on developing the Model Tax Convention of the Organization on economic cooperation and development, besides that he is the expert of the UN Council on the issues of international taxation.