To attention of heads of the organizations renting the real estate in buildings of the International Business Center and the Uzinkomcentre!
From the date of introduction by the Special Republican Commission on the preparation of a program of measures to prevent the importation and distribution of a new type of coronavirus in the Republic of Uzbekistan (hereinafter – the Special Republican Commission) of restrictive measures (quarantine) due to the pandemic COVID-19:
– in order to create a favorable business climate, minimize the consequences of the COVID-19 pandemic, with the risk of subsequent negative impact on the economic condition of the Company’s tenants;
– to provide additional support to Lessees by the Lessor;
– despite the fact that the activity of the Company’s facilities during the quarantine period was not suspended and the service on provision of leased space continued to be provided, –
on the part of JSC International Business Center (hereinafter – the Lessor or the Company) has taken measures to reduce the amount of rental payments for certain periods of restrictive measures (quarantine) due to the COVID-19 pandemic.
In particular, for the period from 30.03.2020 to 29.04.2020 (inclusive), the following decisions were taken and implemented:
1. Issuance of invoices for the days of stay during the period from 30.03.2020 to 29.04.2020, in terms of charging rent to the tenants who actually used and/or were present at the object of lease (in the form of office space and paid parking spaces) at all facilities of the Company, was carried out on the basis of information recorded in the “Record book of visitors of the IBC building”, issued by employees of the Separate Battalion of the National Guard of the Republic of Uzbekistan and video surveillance system data.
2) Tenants who occasionally (up to two days inclusive – regardless of the number of hours or up to 60 minutes during the day – regardless of the number of days) visited the objects of rent (office premises), rent was not charged for the period from 01 to 30 April 2020.
3. For the period from 30.03.2020 to 29.04.2020 the compensation of expenses of the cost of public utilities and other expenses of the Company, including in the part concerning all tax payments and payments from the labor remuneration fund, was carried out at the expense of own funds of JSC “International Business Center”.
Thus, charging of rent payments under office and parking space lease agreements (except for business premises) for the period from 30.03.2020 to 29.04.2020 was carried out proportionally to the number of days of Tenants’ actual presence at the object of lease, which significantly helped Tenants to save significant financial resources and direct the released funds to other purposes.
In addition, part 4 of paragraph 1a of the Decree of the President of the Republic of Uzbekistan dated 20-072020 № UP-6029 “Î additional measures to support the population of business entities in the sphere of public catering trade and services to reduce the negative impact of the coronavirus pandemic is provided ( citation of the 4th paragraph of the Decree of the President of the Republic of Uzbekistan dated 20-0720 № UP-6029 “Î in order to provide additional support to the population and business entities especially in the sphere of public catering trade and services during the coronavirus pandemic to support their income accelerated recovery as the sanitary authorities improve). (hereinafter – paragraph 1a) №UP-6029 of 20.07.2020).
With regard to paragraph 1a) № UP-6029 in the part of the recommendation (citation): “Landlords are recommended to review in 2020 the amount of rent in order to reduce it, including taking into account the tax benefits provided”, it should be noted that in accordance with the Decrees of the President of the Republic of Uzbekistan dated 20.07.2020 from
– 18.05.2020 № UP-5996 “On next measures to support the population and businesses during the coronavirus pandemic”;
– 20.07.2020 № UP-6029 “On additional measures to support the population, business entities, catering, trade and services to reduce the negative impact of coronavirus pandemic” – benefits in the form of exemption of small businesses for the period from 1 June to 31 December 2020 from property tax and land tax.
For the period from June to December 2020, taking into account the provided tax benefits, savings in the form of exemption from land tax will amount to 409,469,735.19 sum:
The results of the calculations reflect that the Company’s loss of income as a result of tenant support in the form of application of the exclusive procedure of charging rent only for the period 29.03.2020. – 30.04.2020 exceeds the total amount of tax benefits for 7 months of 2020 (in the form of exemption from property tax and land tax for the period from June 1 to December 31, 2020), provided by Decrees of the President of the Republic of Uzbekistan № UP-5996 of 18.05.2020 and № UP-6029 of 20.07.2020.
In addition, in accordance with the “Provisional Sanitary Rules and Regulations on the organization of the activities of State bodies and other organizations, as well as business entities under restrictive measures in connection with the COVID-19 pandemic” (SanPiN-0372-20, as amended), approved by the Chief State Sanitary Doctor of the Republic of Uzbekistan on 11 May 2020, the Company has made and, in some cases, is still making additional unscheduled expenditures. As of today, under the requirements of SanPiN-0372-20, previously unrecorded expenses in the amount of UZS 62,590,016.43 (excluding VAT) have been made:
– Sanitary treatment of common areas in all buildings (3 times per week);
– purchase of remote thermal imaging cameras, handheld body temperature meters, antiseptics and separate dispensers for them, containers for disposal of personal protective equipment, medical masks, gloves, etc. –
which directly affects the decrease in the Company’s profitability.
For the period from 01 June to 31 December 2020, the total amount of tax benefits to which the Company is entitled is a calculated amount of 1,345,317,315.14 UZS, including through exemption from tax:
– Land tax at the rate of 409,469,735.19 soums;
– Property tax at the rate of 935,847,579.95 soums.
As of today, according to the analysis of the situation, the total estimated amount of tax benefits is 1,345,317,315.14 soums (provided to the Landlord during 7 months of 2020), including through exemption from: land tax at the rate of 409,469,735.19 soums; property tax at the rate of 935,847,579.95 soums, that is until the end of 2020), is less than the total amount of benefits in the amount of 2,688,228,135.45 soums, actually provided by the Company in favor of all Lessees during the period of severe restrictive measures (i.e. 30.03.2020 – 29.04.2020) at the rate of 1,342,910,820.31 soums.
Thus: – The amount of tax benefits provided to the Company for 7 months of 2020 is 50,04% of the total amount of benefits actually provided by the Company in favor of Tenants for the period 30.03.2020. – – 29.04.2020г.;
– income not received by the Company as a result of tenants’ support in the form of application of the exclusive procedure of charging rent (up to suspension of payments in some cases) only for the period 29.03.2020. – 30.04.2020 exceeds the total amount of tax benefits for 7 months of 2020 (in the form of exemption from property tax and land tax for the period from June 1 to December 31, 2020), provided by Decrees of the President of the Republic of Uzbekistan №UP-5996 of 18.05.2020 and №UP-6029 of 20.07.2020.
However, despite the aforesaid and the fact that the functioning of the real estate objects was not suspended by the Lessor (the service of providing areas for rent continued to be provided), taking into account the understanding of the need for additional support of Lessees, the principle of fairness in doing business, based on the recommendations of part 4 of paragraph 1a) of the Decree of the President of the Republic of Uzbekistan from 20.07.2020 №UP-6029 “On additional measures to support the population, business entities, public catering, trade and services for the reduction of the tax burden on the population, business entities, the public catering industry, trade and services for the period from 01.05.2020 to 31.12.2020:
– creation of favorable business climate;
– Minimizing the consequences of the COVID-19 pandemic, representing the risk of negative impact on the economic condition of tenants –
International Business Centre JSC hereby informs on additional decisions taken on 04.08.2020 regarding application of the next exceptional procedure for calculating the lease payment from July 01, 2020 to August 31, 2020, providing for reduction of the total number of lease days in favour of Lessees in proportion to the total lease cost taken into account:
1. When charging rent under lease agreements (in national and foreign currencies) for the period from July 01, 2020 to August 31, 2020, to take into account a smaller number of days of rent, having provided 9 calendar days in favor of Lessees specified in subparagraphs 1.1-1.3 of this decision. When calculating the total cost of rental services, proportionally reduce and, accordingly, do NOT charge rent for Saturday and Sunday, as well as for the day of religious holiday “Kurban Hayit” on the dates: 18, 19, 25, 26, 31 July 2020 (total in July 2020 – 5 calendar days).
and 1, 2, 8, 9 August 2020 (total in August 2020 – 4 calendar days) Lessees of the following lease objects:
1.1 Office space and common areas in the form of corridors, located in the buildings of the International Business Center and “Uzincentre”.
1.2 Parking spaces in the underground parking lot, located on the minus floors of the International Business Center building.
– In case if invoices for July 2020 under subparagraphs 1.1-1.3 of paragraph 1 of the decision of this Protocol are actually issued to Lessees (without taking into account the execution of paragraphs 1.1. .1 – 1.3), then on the subsequent issue of invoices for August 2020, such Lessees in parallel to the CORRECTORING TRANSFER for July 2020, which provides for a reduction (reduction – in favor of Lessees) of the amount of rental charges in proportion to the reduction of 5 (five) calendar days of rental (for 18, 19, 25, 26, 31 July 2020).
– To take into account that subparagraphs of paragraph 1 of this protocol decision also apply to former contractors (Lessees of office premises, corridors, parking spaces), the term of the lease agreement(s) of which is completed in the period from July 18 to August 10, 2020. At the same time, it is necessary to PROVIDE the previously accrued rent, taking into account the reduction of the number of days of lease for 18, 19, 25, 26, 31 July 2020 and 1, 2, 8, 9 August 2020, as well as a proportional reduction (in favor of Lessees) of the total amount of accrued rent (depending on the date of expiry of the contract).
– In accordance with the terms of the lease agreements, according to which, when calculating the amount of rent for the object of the lease, calendar days of the month are taken into account, i.e. for the whole 31 day of July 2020 and 31 day of August 2020, the leases for the period from July 01 to August 31, 2020 are charged:
– involved business (storage) premises at all the Company’s facilities;
– facilities located on the XVI technical floor of the International Business Center building.
4.1 In case(s) of Lessees who have not provided the Lessor with the certificate of the force majeure confirmation (“force majeure”) issued in the order regulated by the Decree of the Cabinet of Ministers of the Republic of Uzbekistan No.63 dated 15.02.2005, the Company shall pay rent for the period from 01 July to 31 August 2020. “On enacting the mechanism the proof of force majeure (force majeure)”, will be:
– there is disagreement (dissatisfaction) with the Lessor’s application in favor of Lessees of the next exclusive procedure of charging the rent for July, August 2020;
– additional bidding has been initiated with reference to the financial and economic difficulties during the COVID-19 period and with requests to increase the number of rental days not accepted in proportion to the cost of rent, or to provide additional discounts, ignoring the current issues facing Lessor (which, in turn, is in the same conditions as all Lessees);
– electronic and paper invoices are not accepted (within 5 days from the date of issue), –
Such Lessees shall charge rent according to the procedure established by the existing contractual relations, i.e., in strict accordance with the terms of charging the rent amount stipulated in the lease agreements concluded between the parties, i.e., in proportion to the actual number of calendar days in the month(s).
Taking this opportunity, let me express my gratitude to each of our Tenants for the established cooperation and, taking into account that the amount of tax benefits provided to the Company for 7 months of 2020 is only 50,04% of the total amount of benefits actually provided by the Company in favor of Tenants for the period 30.03.2020. – On 29.04.2020, we would like to ask you to take into account that the implementation of the abovementioned next decisions to reduce the total cost of rent, provides the maximum allowed and feasible opportunities for JSC “International Business Center” to provide motivation financial support to Lessees by the end of the current year 2020.