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7.0 Taxation

[NOTE: The Taxation provisions in the Applicable Law will be the starting point for discussions between the Parties and those provisions may require legislative approval or amendment. The provisions set out below may be considered in circumstances where the Applicable Law allows the negotiating parties to modify or establish special taxation issues in an agreement or thru legislative approval or amendment.]

7.1 Taxation – General

(a) The Company shall be subject to all fiscal legislation from time to time in force in the State except where (i) it is exempted wholly or partly from the application of the provisions of a particular Applicable Law pursuant to a validly granted authority under any Applicable Law; or (ii) as otherwise set out in this Agreement.
(b) As soon as practicable after the annual financial statements of the Company are available for each calendar year, but not later than the first calendar quarter of the following calendar year, the Company shall submit to the State an investment report using a format consistent with Good Industry Practice.
(c) Each year’s financial statements shall be accompanied by a certificate of the chief financial officer of the Company to the effect that during the year then ended the Company was in compliance with the requirements of this Agreement and the Tax Law.
(d) Each year’s financial statements shall be accompanied by a listing of all transactions with Affiliates of the Company reflected in such financial statements, identifying the amount of the transaction, the Affiliate involved, and the nature of the transaction. Transactions of the same type with the same entity that are individually immaterial may be aggregated rather than separately listed. The Company shall maintain contemporaneous documentation of each such transaction with any such Affiliate evidencing the pricing of the transaction, including all documentation required by the Tax Law or any regulations issued thereunder.
(e) Each year’s financial statements shall be accompanied by certificate of the chief financial officer of the Company to the effect that (i) with respect to goods or services covered by any pricing agreement in effect between Company and any Affiliate of the Company during the relevant period, the Company’s transfer prices during such year were computed in accordance with the requirements of such pricing agreement and (ii) with respect to goods or services sold or provided in a transaction between the Company and an Affiliate of the Company which are not covered by such pricing agreement, the prices thereof imposed during the relevant period were computed in accordance with the Tax Law.

Example 1
Subject to the provisions in this Agreement, the Company shall pay to the Government and fulfill its tax liabilities including its obligations as a tax withholder as hereinafter provided:

[list of taxes]

The Company shall not be subject to any other taxes, duties, levies, contributions, charges or fees now or hereafter levied or imposed or approved by the Government other than those provided for in this Article and elsewhere in this Agreement.

Example 2
8.3 General Tax Obligations.
To the extent that Company conducts activities constituting the carrying on of business or investment activities for the production of income that are not related to or contemplated in connection with the Project, such activities (the “Extra-Project Activities”) shall be accounted for and treated for purposes of this Section 8.3 as if these Extra-Project Activities are carried on by a legal entity separate from Company not subject to this Section 8.3, but instead subject to all Laws, including the tax laws of the Country, so that the activities contemplated by this Agreement in undertaking the Project by Company (“Project Activities”) are treated as “Ring Fenced” (i.e., separately treated as the sole activities of Company). [ … ] References to Company in this Section 8.3, unless qualified to refer specifically to the deemed separate legal entity, shall be to Company as an entity conducting Project Activities. [ … ] All Laws, including the tax laws, of the Country as they exist from time to time shall apply to the treatment and obligations arising out of Extra-Project Activities. With respect to the Ring Fenced Project Activities of Company, the provisions of the paragraphs in the remainder of this Section 8.3 shall apply.

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