Newsletter-21

111 PUBLIC PRIVATE PARTNERSHIP (PPP) The Ecuadorian PPP arrangement offers incentives and tax ben- efits mainly include: • Tax stability for the term of effectiveness of the investment agreement may be granted by administration. • Investment agreements for PPP projects will have the same term as the delegated management agreement. • Exemption on imports for direct use in project execution, provided the total amount of imports is in line with the cri- teria set by an inter-ministry committee on Public-Private Partnerships for each prioritized sector. • Exemption on income deriving from securities representing obligations at 360 calendar days or more and on transactions conducted in connection with such securities. • Exoneration from payment of income tax for ten years as of the first tax cycle in which operating income is generated on activities included in the PPP’s purpose. • Exoneration from the Foreign Exchange Exit Tax on: pay- ments abroad for imported goods; acquisitions of services; payments to project financers; payments by the company as distribution of dividends or earnings to beneficiaries; and acquisition of shares, rights or participations. • Companies created to undertake these projects will act as withholding agents for the Value Added Tax under the same conditions and the same percentages as government corpora- tions. • Expenses incurred to obtain, maintain and improve non- exempt income will be deductible. • Expenses incurred abroad that are necessary for obtaining income will be deductible. The Turkish PPP arrangement also offers incentives and tax ben- efits mainly include: