majority of its shares which grant rights to distribution of profits are held by Palestinians or by Israelis, respectively.

2. For the purpose of subparagraph a. above, shares held by foreigners will be considered as shares held by Palestinians, except with regard to corporations operating within the settlements and military locations.
   
   
3. The above mentioned principle regarding corporations will apply to partnerships, with the necessary adjustments.
   
   
4. The registration for VAT purposes of corporations and partnerships in which Israelis and Palestinians hold equal rights to distribution of profits, will be according to the place of registration of the corporation or the partnership. Each side may bring such cases for discussion before the joint committee referred to in paragraph 16 below, if it considers that the place of registration for VAT purposes should be different.
   
   

7. Foreign dealers will be registered for VAT purposes in accordance with their place of activity.
   
   
8. The VAT levied on dealers registered for VAT purposes will accrue to the VAT administration with which the dealer is registered and the tax code of that side will apply.
   
   
9. The principles set out in paragraphs 1-9 and 16-17 of this Annex shall also apply to wage - and - profit tax on financial institutions.
   
   
10. There will be clearance of VAT revenues between Israel and the Palestinian Authority according to the following principles:
    
    
1. The VAT clearance will apply to VAT on transactions between dealers registered with different VAT administrations. For the purpose of this paragraph, dealers registered with the Civil Administration shall be considered to be registered with the Palestinian Authority.
   
   
2. The following procedures will apply to clearance of VAT revenues accruing from transactions by dealers registered for VAT purposes:
   
   
1. To be acceptable for clearance purposes, special invoices, clearly marked for this purpose, will be used for transactions between dealers registered by the different sides.
   
   
2. These invoices will be worded either in both Hebrew and Arabic or in English and will be filled out in any of these three languages, provided that the figures are written in "Arabic" (not Hindi) numerals and that the amounts filled out in the invoice are stated also in NIS.
   
   
3. For the purposes of tax rebates, such invoices will be valid for six months from their date of issue.
   
   
4. Representatives of the two sides will meet once a month, on the twentieth day of the month, to present each other with a list of invoices submitted to them for tax rebate, for VAT clearance. This list will include the following details regarding each invoice:
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