TAX LOSS CARRYFORWARD

As already mentioned, starting on January 1, 1996, the offsetting of fiscal losses (IRPJ) and social contribution negative base on income are regulated, respectively, by article 15 and 16 of Law 9.065/95. In both compensations, the calculation base of taxes is limited to 30% of profit in the period after
additions and exclusions to taxable income.

The legal entity that monthly pays the income tax through an estimated calculation, as per a suspension balance sheet or trial balance or as per the annual balance sheet as of December 31, is entitled
to fully offset the fiscal losses and CSLL negative base of certain months of the calendar year with profit of other months of the same year.

There is no concept of tax loss carryback in Brazil, even in case of special operations such as liquidation, merger, among others.