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Enron Mail |
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Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Lynn Aven X-To: Sara Shackleton@ENRON_DEVELOPMENT, Brent Hendry, Don Black X-cc: X-bcc: X-Folder: \Sara_Shackleton_Dec2000_June2001_1\Notes Folders\All documents X-Origin: SHACKLETON-S X-FileName: sshackle.nsf The attached chart summarizes the tax implications of the various options for choice of legal entity for financial trading in Argentina. The chart addressed income taxes only. Moving the operations to Brazil will result in additional transactions taxes that are not addressed in this analysis. As you can see, the tax impact of each option depends the specific set of facts as to how Enron is operating its trading activity. Of particular importance is the concept that the US will tax the earnings of foreign jurisdictions even if there are no US employees involved in the transactions to the extent a US affiliate of Enron is deemed to be providing substantial assistance to the foreign entity that is involved in the financial trading activities. The current structure for financial trading in Argentina is the most tax efficient based upon the way Enron has chosen to conduct its business. The earnings are limited to a single layer of tax in the US. To the extent that the Sao Paulo office develops into an operation that can fully support all trading activity so that there is no support from the US, we may be able to restructure the operations to provide more flexibility to the traders in South America. Even if we shift the activity to a Brazilian entity, the traders will have to follow guidelines to avoid taxation in Argentina as well. Lynn
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