Spreadsheet: sara_shackleton__36404__argtrading
Sheet: Sheet1

Tax Implications Relating to Use of Various Enron Affiliates for Argentine Financial Trading Operations
Enron Entity | Argentina | United States | Brazil | Comments
1.  US entity executes financial trades offshore Argentina | No tax in Argentina as long as activities of Argentine employees do not give rise to a permanent establishment of US company in Argentina (Enron Argentina employee cannot  execute contracts on behalf of ENA) | Taxed in the US | NA | This is the current structure being used for financial trading in Argentina
2.  Argentine company enters into financial trades in Argentina | Taxed in Argentina | Tax in the US to the extent that the US company provides substantial assistance to the Argentine company (back office support, credit support, etc) | NA | This option is not used since the business does not currently warrant establishment of an Argentine office with all capabilities needed to conduct business without substantial assistance from the US.  Support from the US results in taxation of Argentine profits in the US even though the business is conducted out of Argentina.
3.  Enron Brazilian entity ("Enron Brazil") enters into Argentine financial  trades offshore Argentina, receiving substantial assistance for business activities from Enron affiliates in the US | No tax in Argentina as long as of  Enron Brazil employee's activities in Argentina do not give rise to a permanent establishment for Enron Brazil in Argentina.  Enron Brazil employees cannot execute trades on behalf of Enron Brazil in Argentina. | Taxed in the US | Taxed in Brazil | In order to avoid tax in Argentina, the Enron Brazil employees would have to follow the same guidelines currently  followed by Enron International Argentina employees.
4.  Enron Brazil enters into Argentina financial trades in Argentina.  Enron Brazil receives substantial assistance Enron US. | Taxed in Argentina | Taxed in the US | Taxed in Brazil
5.  Cayman Corporation with all activities required to conduct business based in the Caymans, conducts trading operations offshore Argentina | No tax in Argentina | No tax in the US | No Tax in Brazil | Business does not warrant running the financial trading business entirely out of Cayman Islands (would require traders and back office employees by physically located in the Cayman Islands)  The Cayman Islands does not levy an income tax so it is inconsequential the level of activity that takes place in the country.
6.  Cayman Corporation with employees and back office support not resident in the Caymans | Taxed in Argentina if activities of Cayman Corporations' employees give rise to a permanent establishment in Argentina.  To avoid taxation, employees would have to follow same restrictions as in 1 above. | Taxed in the US | Taxed in Brazil if the back office support and/or trading activity is conducted out of Sao Paulo office | The Cayman Corporation would form a branch, most likely in the jurisdiction where its employees are located.
7.  Enron Brazil transacts trades offshore Argentina with  all support for trading activity in Brazil.  No support received from the US. | No Tax | No Tax | Taxed in Brazil | Would require activities be segregated in a separate Brazilian trading company in order to avoid potential  US taxation