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9.0 Financial Records and Statements, Accounting Standards and Currencies
This is my site Written by MMDA Admin on 30 March, 2011 – 5:00 pm

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9.1 Payments and Exchange Rates

(a) Unless otherwise specified in this Agreement, payments to the State may be made in US dollars or other foreign currency which is freely convertible directly to the Central Bank for the account of the State.
(b) The payment of the Company’s direct obligations to the State for Taxes and duties shall be in [COUNTRY CURRENCY], unless the Parties otherwise agree. However, the Company shall make payments of sums it collects on behalf of the State, including but not limited to Taxes withheld from the salaries or wages of the employees of the Company and any other sums payable to other persons from which a portion is required by Applicable Law to be withheld or retained by the Company on behalf of the State, in currency in which such salaries or wages or such other payments are made.
(c) It is the intention of the Parties that neither the State nor the Company should experience an exchange gain or loss at the expense of or to the benefit of the other. However, if there be any gain or loss from exchange of currency, it must be credited or charged to the accounts with the average monthly exchange rates calculated in accordance with this Section identified in the relevant accounting records or statements.

*For additional examples, see 8.3 Foreign Currency Remittance and Availability.

Example 1
Income Tax Obligations of COMPANY.

[..] In addition to the modifications provided in Section 8.3(b) the following modifications shall apply to the Tax Code for such purposes:

(i) The Dollar shall be used as the currency for preparing and maintaining COMPANY’s books and records, for the computing of its taxable income and tax liability and for making payment of taxes due. No inflation adjustment shall apply with respect to the determination of taxable income or tax liability, except as provided in Section 8.3(c)(v)(A) and Section 8.3(b)(iii)(D).
(ii) Accounting for determining gross income, deductions and other matters affecting income tax liability shall be on the accrual method with only such modifications as are specifically provided herein. In no event shall deductions be allowed with respect to the establishment of any reserves. For these purposes, however, the Environmental Reserve Fund or any arrangements required under the Laws (such as Law No. [x]) shall not be considered reserves. Receipts of prepaid income shall be included in gross income in the year of receipt.

Example 2
SECTION 17 – FINANCIAL REPORTING, CURRENCY AND OTHER MATTERS REGARDING PAYMENTS

17.1 Accounting.

All of the Operating Company’s accounting under this Agreement shall be in Dollars and all amounts paid or received, and obligations incurred or transactions carried out, in currency that is [host country] Currency or in any other currency other than Dollars shall be converted to Dollars in accordance with and pursuant to GAAP or IFRS, as applicable, based upon the Prevailing Market Rate of Exchange of Dollars and any such currency at the date of the applicable transaction.

REFER TO MMDA DISCLAIMERS AND MMDA USER’S GUIDE
PRIOR TO ANY USE OF THIS DOCUMENT.

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