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18 Feb 2005

VimpelCom reports receipt of final decision of a 2002 tax review

Moscow and New York (February 18, 2005) — Open Joint Stock Company "Vimpel-Communications" ("VimpelCom" or the "Company") (NYSE: VIP) ) today announced that it has received a final decision of the review of VimpelCom's 2002 Russian tax filing by its tax inspectorate, stating that the Company owes only an additional 344.9 million rubles which is approximately US$12.4 million in taxes plus 129.1 million rubles or approximately US$4.7 million in fines and penalties.

The final decision reflects a reduction from the amount of 408.5 million rubles or approximately US$14.7 million in tax plus 172.1 million rubles or approximately US$6.2 million in fines and penalties, set forth in the preliminary act of the tax inspectorate for 2002. A significant portion of the tax claim exclusive of fines and penalties (251.3 million rubles or approximately US$9.1 million) is the result of the authorities claiming that, in their opinion, value added tax offsets were made incorrectly. Although VimpelCom does not agree with the claims of the tax authorities, the Company will pay this amount, and the Company is considering, under the current circumstances, whether to appeal some or all provisions of this final decision for 2002.

 

This press release contains "forward-looking statements", as the phrase is defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements about potential taxes that may be due by VimpelCom and whether VimpelCom will appeal, or otherwise object to, the acts and decisions of the tax inspector. There can be no assurance that the tax authorities will not claim on the basis of the same asserted tax principles or different tax principles that additional taxes are due for VimpelCom or other entities within the VimpelCom group for the same or additional tax years. The adverse resolution of these and other tax matters that may arise could have a material adverse effect on VimpelCom's business, financial condition and results of operations, including an event of default under VimpelCom's outstanding indebtedness. Certain additional factors that could cause actual results to differ materially from those discussed in any forward-looking statements include the risks described in the Company's Annual Report on Form 20-F for the year ended December 31, 2003 and other public filings made by the Company with the United States Securities and Exchange Commission, which risk factors are incorporated herein by reference. VimpelCom disclaims any obligation to update developments of these risk factors or to announce publicly any revision to any of the forward-looking statements contained in this press release, or to make corrections to reflect future events or developments.

 

For more information, please contact:

 

Valery Goldin
VimpelCom (Moscow)
Tel: 7(495) 974-5888
vgoldin@vimpelcom.com
Ian Bailey/Michael Polyviou
Financial Dynamics
Tel: (212) 850-5600
mpolyviou@fd-us.com



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