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(a) Prior to the Date of Commencement of Commercial Production, the State must exempt all expatriate contractors from any applicable income tax on their fees derived from Project operations under this Agreement and such contractors are not, during such period, entitled to any allowances under the Tax Law.
(b) After the Date of Commencement of Commercial Production, the Company must withhold from the gross payments made by it to non-the State resident contractors for services performed by those contractors and their subcontractors in the State withholding tax in accordance with Applicable Law.

Example 1
Taxation of Associates.
Any Associate of the Concessionaire or the Operating Company engaged within Country solely in Production or Operations exclusively for the Concessionaire or the Operating Company (other than incidental activity) shall be entitled to the same income tax and customs duty treatment as the Concessionaire and the Operating Company, provided that its activities otherwise conform to the requirements of this Agreement applicable to Concessionaire or the Operating Company, including without limitation auditing and reporting provisions. Incidental activity shall be limited to services to the Government, local community groups and residents local to the concession area other than major commercial entities. Such incidental activity, even if for profit, shall not cause such Associate to lose the tax and customs treatment provided pursuant to this Section 14.5 with respect to imports for and income from Production and Operations. The Government shall have the right to treat the Concessionaire, the Operating Company and their Affiliates (but not Associates who are not Affiliates) as a single consolidated entity for purposes of Country tax. Any activities of such Affiliates within Country that are outside of Production and Operations other than incidental activity shall be disaggregated from the taxable income of the single consolidated entity.

REFER TO MMDA DISCLAIMERS AND MMDA USER’S GUIDE
PRIOR TO ANY USE OF THIS DOCUMENT.

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