INCOME TAX WITHHOLDING POLICY FOR NON- RESIDENTS IN ARGENTINA

1. Validity:

1.1 This policy is valid as of November 1, 2017.

2. Scope:

2.1 This policy applies to Non-Resident Merchants that sell intangibles or provide services to users in Argentina, the payment of which is made through the "PayU" or "Dinero Mail by PayU" Platform.

2.2 Those Non-Resident Merchants that sell tangible goods shall be exempt from withholding taxes, if they comply with the requirements set out in paragraph 4.5.2 of this policy.

3. Rationale:

3.1 In accordance with article 5 of the Income Tax Act, (t.o. Decree 649/97, B.O 06/08/97), which is applicable to PayU Argentina, “source gains in Argentina are those that come from assets located, placed or used economically in the Republic, from the performance in the territory of the Nation of any act or activity that could produce benefits, or from events that occurred within the limits of the same, regardless of nationality, domicile or residence of the holder or of the parties involved in the operations, nor the place of signature of the contracts".

3.2 In its article 9, the Regulatory Decree of the Income Tax Law, No. 1,344 / 98, establishes the scope of "Argentine source income", which is defined as income generated by goods or intangibles, and any right located, placed, or economically used in the country, or that has its origin in facts or activities of any kind, produced or developed in the Republic of Argentina.

3.3 The Income Tax levies Argentine source income perceived by Non-Resident Merchants in Argentina and has an aliquot that, as a rule, is 35% of the remittance. The Income Tax is born at the time when the Non-Resident Merchants orders the transference of his income.

3.4 When PayU Argentina acts as an intermediary of the remittance to the Foreign Merchant, it adopts the quality of withholding agent of the Foreign Merchant’s income tax, according to the Argentine legal regime. This implies that PayU is responsible to the Argentine treasury for withholding and paying the tax. Its omission or delay in doing so, makes it jointly liable with respect to the Non-Resident Merchant subject to the tax, which enables the Treasury to collect the due tax during the six (6) years following the moment in which it had to be declared and paid. The sanctions for the non-payment of the tax include the value of the tax, monthly fixed default interests on the amount on the not withheld tax and fines.

4. Exemptions from Income Tax Withholdings:

4.1 By default, PayU will withhold income tax from all its Non-Resident Merchants, in a portion equivalent to 31.5% of their gross sales.

4.2 PayU may, at its sole discretion, and at the request of the Non-Resident Merchant, exempt it from withholdings, or reduce the maximum legal retention (31.5% of the Gross Sale) when, in accordance with Argentine regulations, its income results from a commercial activity that is not taxed, or which is taxed with a lower rate than the maximum legal, provided that the merchant complies with the requirements and conditions set forth below, to PayU’s entire satisfaction.

4.3 Also, at its sole discretion, and at the request of the Non-Resident Merchant, it may exempt it from withholdings when his income is taxed, but he is fiscally a resident of a country that has entered into a treaty with Argentina to avoid double taxation, provided that he complies to PayU’s entire satisfaction with the requirements and conditions set forth below.

4.4 Exemptions or rebates of maximum legal rate for Non-Resident Merchants, due to their commercial activity in Argentina:

4.4.1. The following are the conditions and requirements that Non-Resident Merchants must meet in order to benefit from a reduced legal retention (31.5% of the Gross Sale) or from an exemption from withholding, by virtue of its commercial activity in Argentina, in accordance with the Argentine law.
4.4.2. Conditions:
4.4.3. The merchant must:
4.4.3.1 Be incorporated abroad.
4.4.3.2 Be the beneficial owner of the income received in Argentina.
4.4.3.3 Not possess a permanent establishment in Argentina.
4.4.4 PayU will attest the above conditions to its complete satisfaction.

4.5 Requirements:

4.5.1.1 The merchant’s URL, which will be included in the opinion described below.
4.5.1.2 A description provided by the Merchant of his commercial activities and business model in Argentina, which will be included in the legal opinion described below.
4.5.1.3 A legal opinion in Spanish, rendered by the tax expert appointed by PayU, signed by such expert and by the legal representative of the Client, in the format included in Annex 1, concluding that the activity of the merchant is exempt from withholding tax. If the Merchant performs various commercial activities, the legal opinion will analyze each activity separately. In this case, PayU will apply the highest retention rate of the activities in question.
4.5.1.4 The documentation that proves his incorporation abroad, his present existence and his representation.
4.5.1.5 A certificate issued by the tax authorities of his tax domicile, attesting his place of residence for tax purposes.
4.5.1.6 Sworn statement of the client’s legal representative, in the format included in Annex 2.
4.5.1.7 Any other document that the Argentine tax agencies may require, or that the lawyer who makes renders the opinion deems necessary.
4.5.1.8 The documents set out in paragraphs 4.5.1.4. to 4.5.1.7. shall be officially translated into Spanish and consularized or apostilled at the Argentine Consulate of the country of the client’s tax residence. Documents must be issued with a maximum date of three months prior to their submission to PayU.
4.5.2 The Non-Resident Merchants that are exempt from withholdings, for selling tangible goods in Argentina, will fulfill the following requirements:
4.5.2.1 The documentation that attests their incorporation abroad, their present existence and their representation.
4.5.2.2 A certificate issued by the tax authorities of their tax domicile, attesting their place of residence for tax purposes.
4.5.2.3 Sworn statement of the client’s legal representative, in the format included in Annex 4.

5. Exemptions of the income tax payment by the application of treaties to avoid double taxation:

5.1 By default PayU retains the Income Tax of 31.5% over gross sales of all Non-Resident Merchants.

5.2 PayU may, at its sole discretion, and at the request of a Non-Resident Merchant, exempt it from withholdings on income tax, or apply a lower withholding income tax rate, as the case may be, when, in spite of having taxed income, it can benefit from the celebration of treaties to avoid double taxation between his country of fiscal residence and Argentina.

5.3 In order to do so, the Non-Resident Merchant will comply with the conditions and requirements set forth below

5.4 Conditions:

The Non-Resident Merchants shall:

5.4.1.1 Be incorporated abroad.
5.4.1.2 Be the effective beneficial owner of the income received in Argentina.
5.4.1.3 Have its tax residence in a country that has concluded a treaty in force with Argentina, to avoid double taxation.
5.4.1.4 Not have a permanent establishment in Argentina.
5.4.1.5 Request its remittances to its country of residence for tax purposes.
5.4.2 The above conditions will be attested to PayU’s complete satisfaction.

5.5 Requirements:

5.5.1.1 A legal opinion, in Spanish, rendered by the expert appointed by PayU, signed by such expert and by the legal representative of the Merchant, in the format included in Annex 1, concluding that the activity of the Merchant is exempt from income withholding tax or has a reduced income tax withholding rate, in accordance with a treaty to avoid double taxation.
5.5.1.2 The text of the treaty in question with the annotation of its entry into force. (PayU will obtain it from the link: www.afip.gov.ar/institucional/acuerdos.asp.
5.5.1.3 The documentation that proves his incorporation abroad, his present existence and his representation.
5.5.1.4 A certificate issued by the tax authorities of his tax domicile, attesting that his place of residence for tax purposes is a country that has concluded a treaty with Argentina to avoid double taxation. The certificate must be in the format that is attached as Annex 3 in compliance with the requirements of the General Resolution of AFIP No. 2,228.
5.5.1.5 Any other document which the Argentine tax authority may require, or that the lawyer who renders the opinion deems necessary.
5.5.1.6 The documents set out in paragraphs 5.5.1.3. to 5.5.1.5. shall be officially translated into Spanish and consularized or apostilled at the Argentine Consulate of the client’s tax residence country. Documents must be issued with a maximum period of three months prior to their submission to PayU.

6. In the following cases Income tax exemptions do not apply:

6.1 The following events shall not give rise to a withholding Income Tax exemption.

6.1.1. Non-Resident Merchants who wish to receive income through a third party.
6.1.2. Non-Resident Merchants who are resident for tax purposes in a country that has signed treaties with Argentina to avoid double taxation, who want to receive the payment in a third country.
6.1.3. Any other event, which in the opinion of the PayU, does not give a tight to a withholding tax exemption. .

7. Guarantees

7.1 7.1. If PayU receives a request from the fiscal authorities on the grounds of a discrepancy with regard to the exemption of a retention or aliquot of the retained rate, PayU will retain some or all of the existing or future funds credited to the Non-Resident Merchant’s PayU account, in order to remain harmless of any damage that may lead to the contingency in question. This warranty or any other granted by the Non-Resident Merchant at PayU’s request, with the same purpose, will be maintained until the dispute with the Argentine treasury is settled, applying to all costs and damages that such contingency caused to PayU. PayU will charge the Non-Resident Merchant all damages arising from the contingency that exceed the withholding of funds or granted guarantees.

8. Tax Returns and Fiscal Reversals

8.1 Once the withholding is declared and paid, or the income is transferred to the Non Resident Merchant, PayU will not reimburse withholding made on such sales, even if they are excessive, considering refunds of sales made in favor of payers in Argentina.

8.2 PayU will not manage returns on behalf of the Non-Resident Merchants, from amounts paid to the treasury per income tax withholdings. It will be the sole responsibility of the Non-Resident Merchants to manage any returns from the Treasury, as appropriate.

9. Benefit Continuity

9.1 Annually, no later than the last day of December, the Non-Resident Merchant who is exempt from withholdings or who has a reduced income tax withholding rate will provide PayU an apostilled or consularized statement to establish that at that date, his fiscal situation has not changed in any way. If the Merchant does not provide this, PayU will apply the deduction to its sales at the maximum rate established by the Law, with effect from January 1. of the following year. Notwithstanding the above, the Merchant will give PayU immediate notice if any of the conditions included in this policy change, allowing it to benefit from the exemption or the reduced income tax rate, so that PayU can make the needed adjustments.

9.2 At any time PayU may, based on changes in tax law or its interpretation, or to mitigate risks or patrimonial effects, increase the retention rate applicable to Non-Resident Merchants up to the legal maximum. If doing so, it will give immediate notice to the Merchant.

9.3 PayU reserves the right to unilaterally modify this policy by giving notice to the Non-Resident Merchants a thirty (30) calendar days notice.

10. Liability derived from any tax treatment

10.1 PayU does not provide tax advice to its merchants. Any communication, action or omission by PayU, will not be construed as tax advice on the rating, rates, aliquots, deductions or applicable taxes to their businesses. PayU will exempt the Non-Resident Merchant or will make lower withholdings than the maximum legal rate, based on the tax consultancy hired by the Non-Resident Merchant, without prejudice of its right to review the conclusions of the hired consultancy.

10.2 The Non-Resident Merchant shall be solely responsible for the tax advice hired and for the legal and patrimonial effects arising from it in order to benefit from the exemption or reduction of withholding tax rates. The Non-Resident Merchant will hold PayU harmless for any damage (including judicial costs, expenses and attorneys' fees) incurred per the Argentine tax authorities discrepancy with regard to PayU´s application of withholding tax exemptions or reduced income tax rates. This obligation shall survive the termination of the contractual relationship between PayU and the Merchant and will be in effect during the statute of limitations term counted as from the last withholding made or that should have been made by PayU according to the interpretation of the appropriate authority.

ANNEX 1 NON-RESIDENT MERCHANTS LEGAL OPINION FORMAT

1. Legal name of Foreign Merchants : [According to the incorporation document].
2. Tax Identification number of the country of tax residence:[ ]
3. Place of incorporation of the Non-Resident Merchant: [City, Country]
4. Place of residence for tax purposes of the Non-Resident Merchant: [City, Country]
5. Country in which the Non-Resident Merchant wants to receive remittances : [Country] ¹
6. Description provided by the Non-Resident Merchant of his commercial activity in Argentina: ²
7. URL of the Non-Resident Merchant:
8. Conclusion on whether the income of the Non-Resident Merchant in Argentina is taxable or exempt from income withholding Tax:
9. Aliquot/rate and tax base applicable to the retention/exemption in question:
10. Applicable convention or regulation that supports the above conclusion:
11. In the case of untaxed income under local law, or of enjoying some benefit or exemption under a convention for the avoidance of double taxation, please indicate if you require any additional documentation to that listed in the "Income Tax Withholding Policy for Foreign Clients in Argentina" in order to prove the exemption to the treasury:
12. If a lower rate than the 31.5% of the gross sales of the Client is applied, indicate if there is any additional documentation to that included in the "Policy of Withholding of Income Tax for Non-Resident Merchants in Argentina" to accredit this rate to the treasury.

¹The country to which remittances are made must match the country of residence for tax purposes of the Non-Resident Merchant.

²This must match what is described in the affidavit included in Annex 2 or 3, as appropriate. If merchant performs several commercial activities, each one should be described and analyzed separately. In any case, PayU will apply the highest rate of the activities in question.

[Name, profession, e-mail, telephone and address of the Legal Counsel who renders the opinion].

[Date and Place of issue of the Assessment].

Statement of the Non-Resident Client:

The information contained in paragraphs 1-7 of this legal estimation is accurate and complete and constitutes a sworn statement by the Non-Resident Merchant.

[Signature of the Legal Representative of the Non-Resident Merchant]

[Name of the Legal Representative of the Non-Resident Merchant]

[Legal Name of the Non-Resident Merchant]

[Date and Place of signature of the Non-Resident Merchant]

ANNEX-2 Sworn Statement for Non-Resident Merchants that Sell Intangible Goods or Provide Services in Argentina

I [name of the Legal Representative], acting in my capacity as the legal representative of [legal name of the Non-Resident Merchant], make the following statements under oath:

[Legal Name of the Non-Resident Merchant]:

1. Is the beneficial owner of the income received in Argentina on the occasion of the following commercial activity in that country: [Include description of what you sell in Argentina and the way you do it]
2. The URL of the web page through which he performs his commercial activity in Argentina is: [insert URL]
3. Does not have a permanent establishment in Argentina.
4. Will receive remittances of income perceived in Argentina, in the country of his residence for tax purposes.

This statement is made in the city of [ ] on [date].

[Legal Representative’s Signature]

[Name of Legal Representative]

ID: [ ]

^*This declaration must be made in Spanish or be officially translated into Spanish, must be apostilled, or consularized at the Argentine consulate in the country of residence for tax purposes of the Non-Resident Merchant and have a date that does not exceed three months in advance of the presentation to PayU

ANNEX 3 (Applicable to Non-Resident Merchants that benefit from treaties to Avoid Double Taxation)

CERTIFICATE OF TAX RESIDENCE AND BENEFIT TO PAY (General Resolution - AFIP -No. 2228)

IN FORCE AGREEMENT TO AVOID DOUBLE TAXATION BETWEEN ARGENTINE REPUBLIC AND …………………….. ANNUAL AFFIDAVIT.

CONVENTION en vigueur pour éviter THE DOUBLE IMPOSITION BETWEEN LA RÉPUBLIQUE ARGENTINE ET ……………… DÉCLARATION ANNUELLE.

a) Beneficiary/ Recipient: [Name and Surname or Company´s registered name]. Bénéficiaire/Percepteur: [Prénom et Nom ou raison sociale].
b) Tax Domicile: Domicile fiscal:
c) Income Origin (Article of the Agreement). Origine du Revenu (Article de la Convention).
d) Affidavit of the beneficiary/recipient of the income or, in the case of a society, its legal representative:

The undersigned declares that the society is resident in …………….. and that it does not have a permanent establishment or fixed base in the Republic of Argentina, and that it also meets all the requirements for the implementation of this convention.

Date:

Affidavit of the beneficiary/recipient of the income, or in case of a Company, its legal representative:

The undersigned states that he/she/the Company is resident in …………………. and that he/she/ the Company does not own permanent establishment or fixed base in Argentine Republic, and likewise that he/she/the Company meets all compulsory requirements in order to apply to this agreement.

Date:

Signature of the beneficiary/recipient of the income, or in case of a Company, its legal representative.

Déclaration du bénéficiaire/percepteur du revenu ou, dans le cas d´une société, son représentant légal:

Le soussigné déclare qu’il/la société est résident(e) en……………et qu’il/elle ne posséde pas d’établissement permanent ou de base fixe dans la République Argentine, réunissant également toutes les exigences prévues pour l’application de la présente convention.

Lieu et Date:

Signature du bénéficiaire/percepteur du revenu ou, dans le cas des sociétés, leur représentant légal.
e) Certification of the competent authority of ………………………………..

I do hereby certify that the beneficiary/recipient of the aforementioned income is a resident in ……………………. as regards of the agreement to avoid double taxation between Argentina Republic and …………………... Likewise, as regards the above subsection, this competent authority ratifies/ denies/does not know the statement of the beneficiary/recipient as far as he/she/the Company does not own a permanent establishment or fixed base in the Argentine Republic.

Date:

Seal of the Tax Office.

Signature of the Competent Authority.

Certification de l’autorité compétente de …………………………………..

Je certifie que le bénéficiaire/percepteur des revenus indiqué ci-dessus est résident en………………………..en ce qui concerne la convention pour éviter la double imposition entre le République Argentine et……………………………. Également, par rapport à l’alinéa précédent, cette autorité compétente ratifié/conteste/ ne connaît pas ce qui a été déclaré par le bénéficiaire/percepteur quant à ce qu’il ne possède pas d’établissement permanent ou de base fixe en la République Argentine.

Seal of the Tax Office.

Lieu et Date:

Cachet du bureau fiscal.

Signature de l’Autorité Compétente.

^*[*This affidavit must be apostilled or consularized at the Argentine consulate in the country of residence for tax purposes of the Non-Resident Merchant and have a date that does not exceed three months in advance of the presentation to PayU. If it is not completed in Spanish, it must be officially translated into this language.]

ANNEX-4 Sworn Statement for Non-Resident Merchants who Sell Tangible Goods

I [name of Legal Representative], acting in my capacity as the legal representative of [legal name of Non-Resident Merchant], make the following statements under oath:

[Legal Name of the Non-Resident Merchant]:

1. Is the beneficial owner of the income received in Argentina on the occasion of the following commercial activity in that country: [Include description of what you sell in Argentina and the way you do it]
2. The URL of the web page through which you perform your commercial activity in Argentina is: [insert URL]
3. Sells the following tangible goods in Argentina: Include the description of tangible goods that are sold
4.
5. Does not have a permanent establishment in Argentina.
6. Will receive remittances of the income perceived in Argentina, in the country of his residence for tax purposes.
7. Will immediately inform PayU if it begins to provide services or to sell intangible goods in Argentina.

This statement is made in the city of [ ] on [date].

[Legal Representative’s Signature]

[Name of Legal Representative]

ID: [ ]