Amendment #4 Page 605 of 868 lehlr .0..(3etxr Income and Social Contribution Taxes—The legal ernes ocirraisng Ire Group Ise separate tax returns as regaled by Brazilian tax ewe As such, income taxes rave been determined for purposes d the cornered Inanoel statements on a separate return basis Use of the method may realt in differences wren the stns of the amourts allocated to the Group is compared with anoints presented in the Parent% consolidated statements in general, income tax expense Si Brazil is compiled based on Ire cone:mod statutory lax rate of 34% applied to adjusted taxable income. comprised of 25% for income fax (15% base rate pus a 10% surtax for income in excess of R5240) and 9% for social cora nbution tax (a tax levied on income) This Metr100 Is referred to as We 'real profit' netted. As permitted ureter Brazilian lax legislation, all of the Groups operating project compa nes. where virtually all of tie Groups revenue and substantially all of its operating volt is generated have elected to be taxed under an allernatwe'deemed profit' method Under Iris regime, ent ties with annual gross revenues rot in excess of RS 78 COO may elect to be taxed WWI on deemed taxable income dewed from a defined percentage of revenues Taxable ocorne is computed based on 8% of annual gross operating reverxesard 100% of annual finance revenues This deemed taxable income rs then subecl to income tax al the rate of 15% pils$ alatax of 10% for deemed income in excess of R5240 and social Cortritoban tax at the rate of 12% The Group's tax expense for the year is comprised of current and deterred mom* tax as applicable. in accordance with the applicable tax regime erected by Ire Group legal entities Cunent income tax—The current income tax expense is calculated on the basis of the tax laws enacted or stbstantively enacted at the balance sheet date in accordance wen the applicable elect ons made by roe Grow legal entities The Group reccgraes liabilities for uncert