EN 
ES 
Dear Participants,
We remind you that the company Paz Corp S.A. (hereinafter, indistinctly, "Paz" or the "Corporation"), due to the matters that will be informed and subjected to voting in the Shareholders' Annual General Meeting, called for April 20, 2022, at 9:00 a.m. (the "Meeting") makes available for its shareholders the following information regarding the Substitutive Tax for Final Taxes for the accumulated profits in the Taxable Profits Funds ("ISFUT") of the Corporation, according to the considerations in provisional article 25 of Law 21210 and the instructions provided by the Internal Revenue Service ("SII"). This optional regime is valid until the last business day of April 2022 for the balance of the accumulated profits that have not been taxed by December 31, 2021, and registered in the Corporation's FUT registry by December 31, 2016.
For this, Paz informs its shareholders of the following regarding the ISFUT regime and the procedure to be subject to it:
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According to provisional article 25 of Law 21210, the Corporation may make the accrued taxable income that it holds, generated until December 31, 2016, and that keep their final taxes outstanding (this is complementary and/or additional global taxes) subject to the payment of the ISFUT. This substitutive tax is applied with a 30% fixed rate on the declared base, which can be a part or all of the referred profits.
Against the determined ISFUT, the credit will be on the first category tax paid by the Corporation on the profits subject to this regime. -
Once the ISFUT is paid, it will be understood that the profits subject to the said regime have met the entire final tax taxation process. They may be withdrawn or distributed as appropriate without being subject to the allocation rules considered in the Income Tax Law.
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The Corporation will be subject to the ISFUT payment for a part of the accrued taxable income that it has registered for $35,877,657,189. To file and pay the ISFUT, Paz has determined a credit effective rate (or "TEF") on the first category tax of 0.2693 that will be assigned to the taxable profits subject to this regime. Due to the above, the ISFUT payment will be MM$4,000.
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According to SII's criteria in several instructions(1), some shareholders of the Corporation may choose to receive and use the dividend to which they are entitled, chargeable to the accrued profits in the Corporation's FUT registry that has been subject to the ISFUT regime. In contrast, others may decide not to, and these must be subject to the general taxation rules and follow the general orders of allocation considered in the Tax Income Tax Law.
(1) In particular, among others, Official Letters No. 215 and No. 2762 of 2021. -
Those shareholders that wish to do so may instruct Paz to pay the dividend to which they are entitled, according to the number of shares registered under their name, by midnight of the fifth business day before the date scheduled for the dividend payment, with the right to become subject to the ISFUT regime, authorizing the Corporation to withhold from that payment a percentage equivalent to the supported tax on the profits subject to this regime and that are distributed to the corresponding shareholder.
The profits subject to this regime will be registered in the Corporation's exempt income registry ("REX") until their entire distribution, either chargeable to the profits to be approved in the Meeting or chargeable to any other distribution to be agreed by the Corporation in the future. -
If the shareholder instructs the Corporation to pay the dividend to which they are entitled, chargeable to the profits subject to the ISFUT, the percentage to be withheld on the dividend to be paid to those shareholders for the ISFUT will be 11.149% to then distribute the corresponding remainder, after deducting the amount equivalent to the supported tax. For the above, those shareholders who decide to choose this option must send the "ISFUT PAYMENT INSTRUCTION FORM" to the Corporation available to the shareholders in the following link and send a signed copy of those instructions to the indicated email or mail addresses by May 16, 2022, at 5 p.m.
Note: The shareholders who keep their shares in custody in a brokerage firm (or through a custodian bank) must request them to send the ISFUT Payment Instruction Form to the Corporation, as per the instructions provided in the form. -
The Corporation's shareholders who decide to receive the profits subject to the payment of the ISFUT and provide the corresponding instructions to do so or that, after the mentioned term, have not issued the instructions described in number 6 above, will receive the profits - in the form of dividends - to which they are entitled, completely, without any deductions, and must be subject to the general taxation rules and follow the general orders of allocation considered in the Income Tax Law.
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As a result of one or more shareholders of the Corporation exercising the option described in numbers 5 and 6 above, the profits subject to the ISFUT regime that are not entirely distributed due to the dividend distribution approved in the Meeting (this is the surplus of the amounts subject to the ISFUT) will continue registered in the Corporation's exempt income registry (REX). They may be distributed in the following years, as appropriate, and without being subject to the allocation rules considered in the Income Tax Law.
The ISFUT filed and paid by the Corporation, in the part that had not been allocated to the distribution approved in the Meeting, will constitute a receivable account in their favor that will be allocated to the dividend distributions that are agreed later and as it may correspond for those shareholders of the Corporation that decide to receive dividends chargeable to the balance of the profits subject to the ISFUT and registered in the REX registry.
That receivable account will be readjusted based on the same index and conditions under which the balance of the profits subject to the ISFUT registered in the Corporation's REX registry is readjusted. - In any event, the dividend payment date that will be proposed to the Board is May 20, 2022, whether shareholders choose the option indicated in number 6 or not.
This information, together with the mentioned instructions, has been published on the following website:
https://www.paz.cl/GobiernoCorporativo#junta-accionista.
Instructions Form for the ISFUT
payment option of Paz Corp S.A.
Statement Letter on the Payment of the Substitutive Tax
For Final Taxes (ISFUT) of Paz Corp S.A.
Paz does not issue any opinions on the convenience of choosing a specific tax treatment for the issues addressed in this document. It is not responsible for the decisions shareholders may make in those regards.
For more information, please contact
the Shareholders' Service Department.
