1E9Ct5D

Any amounts paid, credited, delivered, employed or remitted for any reason, either directly orindirectly, to individuals or corporate entities resident or established abroad and residents of taxhavens will only be deductible from the taxable income of a corporate entity in Brazil if the effectivebeneficiary of the entity abroad and recipient of such amounts is identified, if there is proof of theoperating capacity of the individual or entity abroad to carry out the operation, and documentary proofof the payment of the respective price and receipt of the goods, rights or use of the service (art. 26 ofLaw 12,249/2010).6.1.1.2. Branch Office of a Foreign CompanyAs previously indicated in item 3.3 above, the establishment of a branch office produces the following,among other disadvantages of a tax nature: impossibility of deducting expenses paid or credited to thehead office, in the way of royalties, technical and administrative support or similar services (art. 353,III, “a”, of the RIR).6.1.1.3. Capital Gains on Financial InvestmentsEarnings and capital gains derived from financial investments by corporate entities with their principalplace of business and administration in Brazil, of Brazilian or foreign capital, for fixed income orvariable income funds are subject to the levy of withholding income tax at the following rates: 22.5%on investments with terms of up to 180 days; 20% on investments with terms of 181 to 360 days;17.5% on investments with terms of 361 to 720 days; 15% on investments with terms of over 720 days(art. 1 of Law 11,033/04 and RFB Normative Instruction (Instrução Normativa – IN) 1,022 of 5 April2010).Earnings from financial loan operations between corporate entities or between corporate entities andnatural persons are subject to the same tax as fixed-income investments (art. 38 of RFB IN1,022/2010). In the case of intercompany loans, the tax levy also occurs when the operation isconducted between parent companies and subsidiary, associated or related companies. The tax isalso levied on income earned by means of combined operations, conducted in or out of the stockexchanges (art. 730, I of the RIR).The tax is not levied on earnings (fixed or variable income) owned by financial institutions in generaland from investment fund portfolios (art. 14, I and 56, I and II of RFB IN 1,022/2010).These earnings and gains shall constitute the Actual Taxable or Presumed Income and the taxwithheld or paid may be offset against the tax due in the monthly or annual calculation of ActualTaxable Income, or quarterly calculation, in the case of Presumed Income.34