Nigeria Tax Issues

---------------------- 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

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