Message-ID: <20676452.1075846117168.JavaMail.evans@thyme> Date: Fri, 1 Sep 2000 05:05:00 -0700 (PDT) From: kay.mann@enron.com To: kathleen.carnahan@enron.com Subject: Nigeria Tax Issues Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Kay Mann X-To: Kathleen Carnahan X-cc: X-bcc: X-Folder: \Kay_Mann_June2001_4\Notes Folders\'sent mail X-Origin: MANN-K X-FileName: kmann.nsf ---------------------- Forwarded by Kay Mann/Corp/Enron on 09/01/2000 12:05 PM --------------------------- John G Rigby 07/21/1999 06:28 PM To: Kay Mann/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Subject: Nigeria Tax Issues ---------------------- Forwarded by John G Rigby/ENRON_DEVELOPMENT on 07/21/99 06:30 PM --------------------------- seyi.bickersteth@ng.arthurandersen.com on 07/20/99 11:10:01 AM To: Michael Norris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: John G Rigby/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, James MacCallon/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT Subject: Nigeria Tax Issues We will send our opinion by E-mail today 20/7/99. I suggest you get the opinion first and let us discuss on Wednesday. I think the process will be easier if you review our opinion first. Regards. Seyi ______________________________________________________________________________ ______________________________________________________________ To: Seyi Bickersteth cc: jrigby@ei.enron.com, jmaccal@ei.enron.com From: Michael_Norris@ei.enron.com Date: 07/20/99 02:53 AM Subject: Nigeria Tax Issues ______________________________________________________________________________ ______________________________________________________________ Seyi, James MacCallon has now left for Mexico. I am just returning from India and must step in where he left off. I see James has sent a few emails and faxes to you but I can find no reply from AA although there is a 14-July email from you indicating a reply would be sent by 16-July. Have you sent a reply and I have missed it? Given that the commercial team is now at a critical point and needs to understand the Nigeria tax implications for the venture and bid, perhaps we should short-cut this Q&A process and have a conference call. I would suggest early AM Tuesday 20th, what works for you? During the call, John Rigby can provide background on the project then we can discuss the questions James sent you earlier (12th, 16th-AM, 16th-PM). Additionally, I would like to confirm whether the attached Nigeria Tax Chart (TC-NIGE-Elf...) is still valid and touch on the below topics: Are construction activities conducted approx. 30-35 miles offshore Nigeria subject to Nigeria income tax if paid by a Nigerian client (i.e., Elf Petroleum Nigeria, Ltd.)? I recall from advice AA provided 2nd quarter-1998 there is an issue as to whether offshore construction services are "consumed" in Nigeria. The bid package suggest Elf will withhold taxes unless Contractor provides "official documents unquestionably enacting an exemption from any withholdng in connection with the Contract." If the offshore Nigeria activities were outside Nigeria territorial waters, would it be possible to obtain such an exemption certification? Is it still necessary for a foreign company to form a Nigerian subsidiary to conduct business in Nigeria? I recall that at one point Branches need special approval which was difficult to obtain but James informed me this has changed. Have you commonly seen Nigerian and non-Nigerian companies enter into consortiums or contractual joint ventures to execute a construction project in Nigeria? Are there any special issues Enron should be aware of? In the past, a company subject to Nigeria net income tax may have fully satisfied its tax liability with advance taxes retained by its client. However, due to the lack of physical receipts, there was no allowed credit for these advance taxes. Is this still the case? Are you familiar with contractual language used by the Contractor to protect his tax position and ensure receipts are provided in a timely manner? Elf has suggested it would provide receipts "when they are received from the relevant Tax Authority" but this provides little (or no) comfort based on my prior dealings with Nigeria. The bid package language on VAT is somewhat troubling. It suggests Contractor must furnish a copy of its VAT registration before issuing its first invoice. It goes on to add that VAT which may be legally payable by Elf in respect of non-resident Contractor invoices "shall be paid and collected in accordance with the applicable Nigerian Tax laws and Regulations." Can you confirm this would not allow Elf to withhold VAT from Contractor under a so called "reverse charge VAT" mechanism? I look forward to hearing from you. If wish to call me, my direct line is 713-345-6420. My fax line is 713-646-7151. Regards. (See attached file: TC-NIGE-Elf Amenam-Kpono Project.xls) ---------------------- Forwarded by Michael Norris/ENRON_DEVELOPMENT on 07/19/99 02:12 PM --------------------------- James MacCallon 07/19/99 01:54 PM To: Michael Norris/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Subject: Fax sent 12 July 1999 ---------------------- Forwarded by James MacCallon/ENRON_DEVELOPMENT on 07/19/99 01:49 PM --------------------------- James MacCallon 07/12/99 10:37 AM To: Seyi.bickersteth@ng.arthurandersen.com cc: Subject: Fax sent 12 July 1999 Dear Seyi: I am sending a copy of the fax sent to you earlier this day. The attachment is a Word 97 document. Please let me know if you have trouble opening it. Incidentally, I have had the pleasure of working with you in the past. Tim Archer and I met with you a number of years ago regarding the establishment of an indigenous company which was to provide assistance to M-I Nigeria on various levels. I look forward to working with you again. James MacCallon (See attached file: AA&Co_1.doc) - TC-NIGE-Elf Amenam-Kpono Project.xls - AA&Co_1.doc *******************Internet Email Confidentiality Footer******************* Privileged/Confidential Information may be contained in this message. If you are not the addressee indicated in this message (or responsible for delivery of the message to such person), you may not copy or deliver this message to anyone. In such case, you should destroy this message and kindly notify the sender by reply email. Please advise immediately if you or your employer does not consent to Internet email for messages of this kind. 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