Mart Resources Inc MAUXF

For Dr Airtime: taxes in 2014

[Fernando2010]

Dr Airtime: I read your post on IV regarding taxes.

https://www.investorvillage.com/smbd.asp?mb=12706&mn=7667&pt=msg&mid=13325894

Maybe the tax rate in 2014 won´t be as high as 65% (income tax for marginal fields) but we will likely be obligated to pay:
- 30% tax on the net income generated by the technical services provided to the JV (similar to current situation)
- compensation to our JV partners for the application of "their" losses to offset the 65% rate at the JV level (see the Tax benefit contribution that we have been accruing in 2012 and so far in 2013)
- a reduced tax rate in the JV (likely something less than 65%, but higher than 30%).

This means that we will likely be subject to some kind of double taxation in Nigeria (we will pay taxes both as a member of the JV and a third party technical assistant to it). I´m still not sure about it, but it is possibility that I wouldn´t disregard.

Just my oppinion

Fernando

[zeus55]

"- compensation to our JV partners for the application of "their" losses to offset the 65% rate at the JV level (see the Tax benefit contribution that we have been accruing in 2012 and so far in 2013)" --------------------------------------------------------------------------------------- During one of the previous conference calls, I remember Wade saying that those Tax Benefit

[Fernando2010]

Zeus: see note 22 of financial statements for 2012: "For the year ended December 31, 2012 the Company recorded $10.6 million of tax benefit contributions. This represents the Company’s costs relating to the tax incentives granted to Mart’s co-venturers with respect to the petroleum operation at the Umusadege field. The payment of the tax benefit contributions will cease upon the expiry of

[zeus55]

I don't think it has anything to do with "tax losses"

[Fernando2010]

Zeus: I´m not saying that the "tax benefit contributions" has anything to do with tax losses. My reasoning is: if we had to pay to enjoy the tax incentives granted to our co-venturers in the past, we will likely be asked to pay (one way or the other) to take advantage of their "tax accumulated losses" in the future. But it´s just a guess, not a fact Fernando

[zeus55]

Sorry Fernando, I do not follow your reasoning. The Tax Benefit contributions seem to have had something to do with the Pioneer Status of Umusadege, which is now coming to an end. So I see no reason for Mart to have to continue paying their partners any kind of compensation. Mart will be subject to corporate taxes, and as far as I know, that is all.