Hi George,

Please see the summary of 2018 and 2016 cases in the attached spreadsheet.

Here are our answers:

1. Yes, the amount of USD 275k is the settlement amount for the entirety of both the 2016 and 2018
cases.

2. In relation to 1, there would be no further fees to be paid to the BIR. The remaining expense would
only be the professional fees.

3. As to the manner of payment, I will send a separate email for this.

4. The payment for the settlement amount may be recorded in the accounting records as follows:

 For basic deficiency tax – these are 2016 and 2018 expenses. Therefore, the amounts may be
presented as adjustment to the retained earnings (prior period adjustment).
 For interest, compromise penalty, etc. – These are expenses for the current year but only the
interest may be deducted for income tax purposes.

5. The process is as follows:

 The BIR will issue: (1) an amended assessment or “FDDA” which reflects the adjusted figures
based on the settlement and (2) BIR Form 0605 (the form we use to pay deficiency tax
assessment).
 P3I shall pay the amounts due (separate email). The BIR Form 0605 will serve as our evidence of
payment of the assessed taxes.
 After 1 month, the BIR will issue a Termination Letter which states that the tax cases (2018 and
2016) are now closed and terminated.
 For your assurance, we can file a request for “Tax Clearance” for both 2018 and 2016 from the
BIR after receiving the termination letter.