Common use of Income tax - On December Clause in Contracts

Income tax - On December. 8, 2005, the 2005-13 resolution from the National Free Trade Zone Council (hereinafter “CONAZOFRA”) was published on the Official Gazette No. 161, by which Quiport was registered as a user of the Free Trade Zone (“FTZ”), managed by Corporación Aeropuerto y Xxxx Xxxxxx del Distrito Metropolitano de Quito (“CORPAQ”) and was thus granted the benefits provided under the law for 20 years. Pursuant to the Investment Protection Agreement, Ecuador has guaranteed Quiport specific legal and tax stability with respect to the legal framework in effect on June 24, 2003. Furthermore, these rights were reaffirmed on August 9, 2010, when Quiport, the Municipality and the Management Unit entered into the Strategic Alliance Agreement, whereby the Municipality recognized the existence of the Free Trade Zone Tax Exemption and agreed to indemnify Quiport for any tax incurred arising from its loss. The Free Trade Zone Law enacted on February 19, 1991, entitles FTZ users to a 100% income tax exemption. Chapter XII of the Tax Law pertaining to Free Trade Zones establishes the following:  Management companies and users of free trade zones shall, in all their acts and contracts undertaken in the free trade zone, benefit from exemption from all income tax or any substitute tax thereof, as well as from value added tax, and payment of provincial, municipal and any other taxes created, even if express exoneration is required.  Free trade zone users shall benefit from total exoneration of all taxes imposed on patents and all current taxes applicable to production, use of patents and trademarks, technology transfers and the repatriation of earnings.  Management companies and users of free trade zones shall benefit from the exemptions indicated in this chapter for a period of 20 years as from the referred resolution. Such period may be extended if required by Consejo Nacional de Zonas Francas – CONAZOFRA.  Payments made by users for occasional services received from overseas technicians are income tax exempt and shall not give rise to withholdings. On January 11, 2007, through resolution No. 2007-02, CONAZOFRA approved the request submitted by Quiport to be a user in the Free Trade Zone of the old Xxxxxxxx Sucre International Airport (MSIA) with entitlement to the benefits included in the Free Trade Zone Law up to 5 years. The Organic Code of Production, Trade and Investment published in the Official Gazette on December 29, 2010, eliminates the FTZ regime, but maintains all the rights and obligations established when the user’s acquired such designation for previously registered FTZ users. On October 6, 2011, the Corporation requested to Empresa Pública Metropolitana de Servicios Aeroportuarios y Gestión de Zonas Francas y Regímenes Especiales (EPMSA), as Administrator of the Free Zones of the New Quito International Airport (NQIA) and the Xxxxxxxx Sucre International Airport (MSIA), to ratify and extend the periods granted for the operation of the New Quito International Airport Project (the Project), which includes not only construction of the new airport but also operation of the former airport, until March 31, 2013. On October 12, 2011, EPMSA recommended to the Coordinating Ministry of Production, Employment and Competitiveness, in its capacity of President of the Sector Board for Production, accepting the ratification and extension of the period requested by Quiport. On November 30, 2011, the members of the Sector Board for Production resolved to approve that the petition submitted by Quiport with respect to both the Xxxxxxxx Sucre International Airport (MSIA) as well as the New Quito International Airport (NQIA) to extend and ratify the qualifications of Free Trade Zones users within the framework of the Strategic Alliance Agreement and Construction Contract. Despite the facts mentioned above, on February 24, 2017, the Internal Revenue Service (SRI) started a tax assessment for fiscal year 2013. In addition, on January 26, 2018, and on June 14, 2018, Xxxxxxx received notices upon tax assessments in connection to fiscal years 2014 and 2015, respectively. Details of the revisions described above are included in note 25. On February 2, 2021, the SRI, through Official Letter No. DZ9-XXXXXXX00-00000012, informed Corporación Quiport that they will initiate the review process for fiscal year 2017. As of the date of issuance of the financial statements, the tax authority has not issued its conclusion regarding the review process. The years 2016 to 2020, remains open for review by the SRI, and based on the evaluation of legal advisors and management, it is considered possible the existence of determinations by the concepts mentioned above.

Income tax - On December. 8, 2005, the 2005-13 resolution from the National Free Trade Zone Council (hereinafter “CONAZOFRA”) was published on the Official Gazette No. 161, by which Quiport was registered as a user of the Free Trade Zone (“FTZ”), managed by Corporación Aeropuerto y Xxxx Xxxxxx del Distrito Metropolitano de Quito (“CORPAQ”) and was thus granted the benefits provided under the law for 20 years. Pursuant to the Investment Protection Agreement, Ecuador has guaranteed Quiport specific legal and tax stability with respect to the legal framework in effect on June 24, 2003. Furthermore, these rights were reaffirmed on August 9, 2010, when Quiport, the Municipality and the Management Unit entered into the Strategic Alliance Agreement, whereby the Municipality recognized the existence of the Free Trade Zone Tax Exemption and agreed to indemnify Quiport for any tax incurred arising from its loss. The Free Trade Zone Law enacted on February 19, 1991, entitles FTZ users to a 100% income tax exemption. Chapter XII of the Tax Law pertaining to Free Trade Zones establishes the following:  ▪ Management companies and users of free trade zones shall, in all their acts and contracts undertaken in the free trade zone, benefit from exemption from all income tax or any substitute tax thereof, as well as from value added tax, and payment of provincial, municipal and any other taxes created, even if express exoneration is required.  ▪ Free trade zone users shall benefit from total exoneration of all taxes imposed on patents and all current taxes applicable to production, use of patents and trademarks, technology transfers and the repatriation of earnings.  ▪ Management companies and users of free trade zones shall benefit from the exemptions indicated in this chapter for a period of 20 years as from the referred resolution. Such period may be extended if required by Consejo Nacional de Zonas Francas – CONAZOFRA.  ▪ Payments made by users for occasional services received from overseas technicians are income tax exempt and shall not give rise to withholdings. On January 11, 2007, through resolution No. 2007-02, CONAZOFRA approved the request submitted by Quiport to be a user in the Free Trade Zone of the old Xxxxxxxx Sucre International Airport (MSIA) with entitlement to the benefits included in the Free Trade Zone Law up to 5 years. The Organic Code of Production, Trade and Investment published in the Official Gazette on December 29, 2010, eliminates the FTZ regime, but maintains all the rights and obligations established when the user’s acquired such designation for previously registered FTZ users. On October 6, 2011, the Corporation requested to Empresa Pública Metropolitana de Servicios Aeroportuarios y Gestión de Zonas Francas y Regímenes Especiales (EPMSA), as Administrator of the Free Zones of the New Quito International Airport (NQIA) and the Xxxxxxxx Sucre International Airport (MSIA), to ratify and extend the periods granted for the operation of the New Quito International Airport Project (the Project), which includes not only construction of the new airport but also operation of the former airport, until March 31, 2013. On October 12, 2011, EPMSA recommended to the Coordinating Ministry of Production, Employment and Competitiveness, in its capacity of President of the Sector Board for Production, accepting the ratification and extension of the period requested by Quiport. On November 30, 2011, the members of the Sector Board for Production resolved to approve that the petition submitted by Quiport with respect to both the Xxxxxxxx Sucre International Airport (MSIA) as well as the New Quito International Airport (NQIA) to extend and ratify the qualifications of Free Trade Zones users within the framework of the Strategic Alliance Agreement and Construction Contract. Despite the facts mentioned above, on February 24, 2017, the Internal Revenue Service (SRI) started a tax assessment for fiscal year 2013. In addition, on January 26, 2018, and on June 14, 2018, Xxxxxxx received notices upon tax assessments in connection to fiscal years 2014 and 2015, respectively. Details of the revisions described above are included in note 25. On February 2, 2021, the SRI, through Official Letter No. DZ9-XXXXXXX00-00000012, informed Corporación Quiport that they will initiate the review process for fiscal year 2017. As of the date of issuance of the financial statements, the tax authority has not issued its conclusion regarding the review process. The years 2016 2018 to 2020, remains open for review by the SRI, and based on the evaluation of legal advisors and management, it is considered possible the existence of determinations by the concepts mentioned above.

Income tax - On December. 8, 2005, the 2005-13 resolution from the National Free Trade Zone Council (hereinafter “CONAZOFRA”) was published on the Official Gazette No. 161, by which Quiport was registered as a user of the Free Trade Zone (“FTZ”), managed by Corporación Aeropuerto y Xxxx Xxxxxx del Distrito Metropolitano de Quito (“CORPAQ”) and was thus granted the benefits provided under the law for 20 years. Pursuant to the Investment Protection Agreement, Ecuador has guaranteed Quiport specific legal and tax stability with respect to the legal framework in effect on June 24, 2003. Furthermore, these rights were reaffirmed on August 9, 2010, when Quiport, the Municipality and the Management Unit entered into the Strategic Alliance Agreement, whereby the Municipality recognized the existence of the Free Trade Zone Tax Exemption and agreed to indemnify Quiport for any tax incurred arising from its loss. The Free Trade Zone Law enacted on February 19, 1991, entitles FTZ users to a 100% income tax exemption. Chapter XII of the Tax Law pertaining to Free Trade Zones establishes the following:  Management companies and users of free trade zones shall, in all their acts and contracts undertaken in the free trade zone, benefit from exemption from all income tax or any substitute tax thereof, as well as from value added tax, and payment of provincial, municipal and any other taxes created, even if express exoneration is required.  Free trade zone users shall benefit from total exoneration of all taxes imposed on patents and all current taxes applicable to production, use of patents and trademarks, technology transfers and the repatriation of earnings.  Management companies and users of free trade zones shall benefit from the exemptions indicated in this chapter for a period of 20 years as from the referred resolution. Such period may be extended if required by Consejo Nacional de Zonas Francas – CONAZOFRA.  Payments made by users for occasional services received from overseas technicians are income tax exempt and shall not give rise to withholdings. On January 11, 2007, through resolution No. 2007-02, CONAZOFRA approved the request submitted by Quiport to be a user in the Free Trade Zone of the old Xxxxxxxx Sucre International Airport (MSIA) with entitlement to the benefits included in the Free Trade Zone Law up to 5 years. The Organic Code of Production, Trade and Investment published in the Official Gazette on December 29, 2010, eliminates the FTZ regime, but maintains all the rights and obligations established when the user’s acquired such designation for previously registered FTZ users. On October 6, 2011, the Corporation requested to Empresa Pública Metropolitana de Servicios Aeroportuarios y Gestión de Zonas Francas y Regímenes Especiales (EPMSA), as Administrator of the Free Zones of the New Quito International Airport (NQIA) and the Xxxxxxxx Sucre International Airport (MSIA), to ratify and extend the periods granted for the operation of the New Quito International Airport Project (the Project), which includes not only construction of the new airport but also operation of the former airport, until March 31, 2013. On October 12, 2011, EPMSA recommended to the Coordinating Ministry of Production, Employment and Competitiveness, in its capacity of President of the Sector Board for Production, accepting the ratification and extension of the period requested by Quiport. On November 30, 2011, the members of the Sector Board for Production resolved to approve that the petition submitted by Quiport with respect to both the Xxxxxxxx Sucre International Airport (MSIA) as well as the New Quito International Airport (NQIA) to extend and ratify the qualifications of Free Trade Zones users within the framework of the Strategic Alliance Agreement and Construction Contract. Despite the facts mentioned above, on February 24, 2017, the Internal Revenue Service (SRI) started a tax assessment for fiscal year 2013. In addition, on January 26, 2018, and on June 14, 2018, Xxxxxxx received notices upon tax assessments in connection to fiscal years 2014 and 2015, respectively. Details of the revisions described above are included in note 25. On February 2, 2021, the SRI, through Official Letter No. DZ9-XXXXXXX00-00000012, informed Corporación Quiport that they will initiate the review process for fiscal year 2017. As of the date of issuance of the financial statements, the tax authority has not issued its conclusion regarding the review process. The years 2016 to 20202019, remains open for review by the SRI, and based on the evaluation of legal advisors and management, it is considered possible the existence of determinations by the concepts mentioned above.

Income tax - On December. 8, 2005, the 2005-13 resolution from the National Free Trade Zone Council (hereinafter “CONAZOFRA”) was published on the Official Gazette No. 161, by which Quiport was registered as a user of the Free Trade Zone (“FTZ”), managed by Corporación Aeropuerto y Xxxx Xxxxxx del Distrito Metropolitano de Quito (“CORPAQ”) and was thus granted the benefits provided under the law for 20 years. Pursuant to the Investment Protection Agreement, Ecuador has guaranteed Quiport specific legal and tax stability with respect to the legal framework in effect on June 24, 2003. Furthermore, these rights were reaffirmed on August 9, 2010, when Quiport, the Municipality and the Management Unit entered into the Strategic Alliance Agreement, whereby the Municipality recognized the existence of the Free Trade Zone Tax Exemption and agreed to indemnify Quiport for any tax incurred arising from its loss. The Free Trade Zone Law enacted on February 19, 1991, entitles FTZ users to a 100% income tax exemption. Chapter XII of the Tax Law pertaining to Free Trade Zones establishes the following:  ▪ Management companies and users of free trade zones shall, in all their acts and contracts undertaken in the free trade zone, benefit from exemption from all income tax or any substitute tax thereof, as well as from value added tax, and payment of provincial, municipal and any other taxes created, even if express exoneration is required.  ▪ Free trade zone users shall benefit from total exoneration of all taxes imposed on patents and all current taxes applicable to production, use of patents and trademarks, technology transfers and the repatriation of earnings.  ▪ Management companies and users of free trade zones shall benefit from the exemptions indicated in this chapter for a period of 20 years as from the referred resolution. Such period may be extended if required by Consejo Nacional de Zonas Francas – CONAZOFRA.  ▪ Payments made by users for occasional services received from overseas technicians are income tax exempt and shall not give rise to withholdings. On January 11, 2007, through resolution No. 2007-02, CONAZOFRA approved the request submitted by Quiport to be a user in the Free Trade Zone of the old Xxxxxxxx Sucre International Airport (MSIA) with entitlement to the benefits included in the Free Trade Zone Law up to 5 years. The Organic Code of Production, Trade and Investment published in the Official Gazette on December 29, 2010, eliminates the FTZ regime, but maintains all the rights and obligations established when the user’s acquired such designation for previously registered FTZ users. On October 6, 2011, the Corporation requested to Empresa Pública Metropolitana de Servicios Aeroportuarios y Gestión de Zonas Francas y Regímenes Especiales (EPMSA), as Administrator of the Free Zones of the New Quito International Airport (NQIA) and the Xxxxxxxx Sucre International Airport (MSIA), to ratify and extend the periods granted for the operation of the New Quito International Airport Project (the Project), which includes not only construction of the new airport but also operation of the former airport, until March 31, 2013. On October 12, 2011, EPMSA recommended to the Coordinating Ministry of Production, Employment and Competitiveness, in its capacity of President of the Sector Board for Production, accepting the ratification and extension of the period requested by Quiport. On November 30, 2011, the members of the Sector Board for Production resolved to approve that the petition submitted by Quiport with respect to both the Xxxxxxxx Sucre International Airport (MSIA) as well as the New Quito International Airport (NQIA) to extend and ratify the qualifications of Free Trade Zones users within the framework of the Strategic Alliance Agreement and Construction Contract. Despite the facts mentioned above, on February 24, 2017, the Internal Revenue Service (SRI) started a tax assessment for fiscal year 2013. In addition, on January 26, 2018, and on June 14, 2018, Xxxxxxx received notices upon tax assessments in connection to fiscal years 2014 and 2015, respectively. Details of the revisions described above are included in note 25. On February 2, 2021, the SRI, through Official Letter No. DZ9-XXXXXXX00-00000012, informed Corporación Quiport that they will initiate the review process for fiscal year 2017. As of the date of issuance of the financial statements, the tax authority has not issued its conclusion regarding the review process. The years 2016 to 20202019, remains open for review by the SRI, and based on the evaluation of legal advisors and management, it is considered possible the existence of determinations by the concepts mentioned above.