1. Nexia International Tax Conference Cape Town – May 2009 International Tax Structuring (II) Rajesh Sharma Ton Krol

2. Option I Irish ServerCo Dot.com U.S. Dot.com International (The Netherlands) ServerCo (Ireland) Dot.com UK Dot.com France Other European Customers 100%

3. Background: Option I Dot.com is a US (Delaware) company. Engaged in e-commerce activities by providing content to subscribers over the internet. Relies on banner advertising to generate revenues. Paid on a per “click – through” basis. ServerCo engaged in trading activity in Europe.

4. Structuring Establish a holding company in a tax haven that it is seeking to IPO in the future. A server company will be established in a low tax jurisdiction (Ireland). All content owned by ServerCo and provided to overseas operating companies. Overseas operating companies will act as an agent of ServerCo and will enter into contracts with local providers on banner, sponsorship and other e-commerce arrangements. Dot.com US will license existing content to ServerCo on an arms length basis. All new content and other intellectual property will be developed in the US but ServerCo will be the owner. Dot.com US provides contract R&D and technical support.

5. Taxation matters for consideration 1.Is the location of international company in a tax haven appropriate? 2.Is the location of ServerCo in Ireland appropriate? 3.Does ServerCo have sufficient substance in Ireland? 4.What are the implications of using Ireland (a VATable jurisdiction) for the provision of content to other companies in Europe and elsewhere? 5.Is there a risk of a permanent establishment in each operating location? 6.What are the tax implications for Dot.com International in its jurisdiction – (the Netherlands)? 7.What are the US tax implications for the transfer of existing content to ServerCo? Is it a license or a disposal? 8.What is the basis for determining an arms length price for the R&D and technical support performed in the US? 9.Are there any US anti-avoidance provisions such as sub Part F re. profits in ServerCo? 10.What if the ‘check the box’ election is made for ServerCo and the operating companies so as to make them transparent for US tax purposes. If so, what is achieved by the structure?

6. Dot.com IP License Co (Ireland) Option II Irish IP LicenseCo Dot.com U.S. Dot.com International (The Netherlands ) Dot.com UK Dot.com France Other European Customers 100% European Customers European Customers Royalties

7. Background: Option II Dot.com is a US (Delaware) company. Engaged in e-commerce activities by providing content to subscribers over the internet. Relies on banner advertising to generate revenues. Paid on a per “click – through” basis. Each operating company carries on trading activities.

8. Taxation matters for consideration 1.Is there a reduced risk that Irish IP Co has a permanent establishment in the operating companies. 2.Is it appropriate to use the Netherlands as the intermediate holding company? 3.What are the withholding tax implications for the payment of royalties from the operating companies to Irish IP Co. Additionally, what is the withholding tax on the payments from Irish IP Co to Dot.com US? 4.How will Dot.com International be taxed in the Netherlands? 5.What are the US tax implications on the licensing of the existing IP/content to Irish IP Co. 6.Are there any transfer pricing issues on the licensing of the IP and content to the operating companies? 7.Are there any US anti-avoidance provisions on the overseas operations? 8.What role does the ‘check the box’ rules play in the structure?