Emerging Markets Rates and Currencies Handbook

Permitted, subject to documentation. Unwinding: Permitted but no FX gain is allowed, based on prevailing market rates. Early Maturity: Permitted, based on prevailing market rates. Documentation Requirements For Spot deals underlying documentation is only required at settlement of the FX transaction. For Forward deals, it is required at time of booking. Trade Flows FX trades related to local resident entities must be backed by commercial/financial transactions. Underlying documents are required for imports of goods and services. With regards to hedging: in addition to an FX Master agreement (for longer than 1Y, an ISDA will be required), supporting documents to be provided to the bank on deal booking date for FX forwards (contracts, import documents, export declarations, final invoices or purchase orders from foreign customers). Capital Flow and FDI Investment flows for local resident entities must be converted in LCY upon receipt and must be registered with the Moroccan Exchange Office. Capital injections/dividend payments/FDIs cannot be hedged onshore at the moment, but hedging of these flows could be allowed in a near future. Intercompany loan hedging is allowed. Citibank Maghreb S.A. Zenith Millenium Lotissement Attaoufik, Immeuble 1, Sidi Maarouf Casablanca 20190 FX Sales Contact: +2125 2248 9657 Tax Summary – Morocco Morocco Country Tax Deductibility and Considerations Inter-Co Debt Offshore Bank Loans Offshore Local Borrowing Derivatives Equities W/H Tax • 10% WHT • Under certain tax treaties can be reduced • Interest on foreign currency loans with maturity > 10 years is WHT exempt • Interest income from tax residents (other than FIs) is subject to 20% WHT. The WHT is deductible. • Interest on foreign currency loans with maturity > 10 years is WHT exempt • N/A • 13.75% WHT on dividends • Under certain tax treaties can be reduced • WHT on dividends exemption if distributed offshore for entities established in free trade zones (FTZ) to activities performed in FTZ Deductibility of interests • No specific thin cap rules • Interest on loans from direct shareholders is tax deductible if capital is fully paid in • Deductible interest limited to (i) portion of loan not exceeding share capital equity • No specific thin cap rules • N/A • N/A • N/A