Tax gross-up Clause Samples
A tax gross-up clause requires one party to increase a payment so that the recipient receives the full amount due after accounting for any taxes that may be withheld or deducted. In practice, if a payment is subject to withholding tax, the payer must pay an additional amount to ensure the recipient is not financially disadvantaged by the tax deduction. This clause is commonly used in cross-border transactions to ensure that tax obligations do not reduce the agreed-upon payment, thereby allocating the risk of tax deductions to the payer and ensuring the recipient receives the intended net amount.
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Tax gross-up. 19.2.1 Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
19.2.2 The Company shall promptly upon becoming aware that an Obligor is required by law to make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly.
19.2.3 Each Lender as at the date of this Agreement confirms that it is a Qualifying Lender. This confirmation is given as at the date of this Agreement. A Lender which becomes party to this Agreement by means of a Transfer Certificate shall confirm therein whether it is or is not a Qualifying Lender. Each Lender which confirmed that it was a Qualifying Lender undertakes to notify the Facility Agent and the Company promptly upon becoming aware of it ceasing to be a Qualifying Lender (other than as a result of any change after it became a Lender under this Agreement, in (or in the interpretation, administration or application of) any law or Treaty, or any published practice or concession of any relevant Tax authority). If the Facility Agent receives such notification from a Lender it shall notify the Company and the relevant Obligor.
19.2.4 If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.
19.2.5 An Obligor is not required to make an increased payment to a Lender under sub- clause 19.2.4 above for a Tax Deduction in respect of Tax imposed by the United Kingdom or the United States from a payment of interest on a Loan, if on the date on which the payment falls due:
(a) the payment could have been made to the relevant Lender without a Tax Deduction if it was a Qualifying Lender (other than a Treaty Lender), but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty, or any published practice or concession of any relevant Tax authority; or
(b) the relevant Lender is a Treaty Lender and the Obligor making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations, if any, under sub-clause 19.2...
Tax gross-up. (a) Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
(b) The Borrowers shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly. Similarly, a Lender shall notify the Facility Agent on becoming so aware in respect of a payment payable to that Lender. If the Facility Agent receives such notification from a Lender it shall notify the Borrowers and that Obligor.
(c) If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.
(d) If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
(e) Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Facility Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
Tax gross-up. If notwithstanding the manner in which Tax indemnity payments and Tax Benefit payments were reported, there is an adjustment to the Tax liability of a Company as a result of its receipt of a payment pursuant to this Agreement, such payment shall be appropriately adjusted so that the amount of such payment, reduced by the amount of all Income Taxes payable with respect to the receipt thereof (but taking into account all correlative Tax Benefits resulting from the payment of such Income Taxes), shall equal the amount of the payment which the Company receiving such payment would otherwise be entitled to receive pursuant to this Agreement.
Tax gross-up. (a) Notwithstanding anything in this Agreement to the contrary, if it shall be determined that any payments, benefits and distributions due under this Agreement and those which are otherwise payable or distributable to or for the benefit of the Employee relating to the termination of the Employee’s employment in connection with a change of control of the Company, including a Change of Control (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, including without limitation (i) payments, benefits and distributions pursuant to Section 3 of this Agreement, and (ii) deemed amounts under the Code, resulting from the acceleration of the vesting of any stock options or other equity-based incentive award) (all such payments, benefits and distributions being referred to herein as “Gross Payments”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Employee with respect to the excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Company shall pay to the Employee an additional payment (a “Gross-Up Payment”) in an amount such that after the payment by the Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed on the Gross-Up Payment, the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed on the Gross Payments. Notwithstanding the foregoing provisions of this Section 10(a), if it shall be determined that the Employee is entitled to a Gross-Up Payment, but that the Gross Payments would not be subject to the Excise Tax if the Gross Payments were reduced by an amount that is equal to or less than 10% of the portion of the Gross Payments that would be treated as “parachute payments” under Section 280G of the Code, then the amounts payable to the Employee under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to the Employee without giving rise to the Excise Tax (the “Safe Harbor Cap”), and no Gross-Up Payment shall be made to the Employee. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Sections 3(a)(i) and (ii), unless an alternative method o...
Tax gross-up. (a) All payments to be made by an Obligor to any Owners under the Transaction Documents shall be made free and clear of and without any Tax Deduction unless such Obligor is required to make a Tax Deduction, in which case the sum payable by such Obligor (in respect of which such Tax Deduction is required to be made) shall be increased to the extent necessary to ensure that the Owners receives a sum net of any deduction or withholding equal to the sum which it would have received had no such Tax Deduction been made or required to be made.
(b) The Charterers shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Owners accordingly.
(c) If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
(d) Within thirty (30) days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Owners evidence reasonably satisfactory to the Owners that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
Tax gross-up. 6.1 All payments to be made by the Company to any Noteholder under the Notes or the Deed shall be made free and clear of and without any Tax Deduction unless it is required to make a Tax Deduction pursuant to applicable law, in which case the sum payable by it (in respect of which such Tax Deduction is required to be made) shall be increased to the extent necessary to ensure that such Noteholder receives a sum net of any deduction or withholding equal to the sum which it would have received had no such Tax Deduction been made or required to be made.
6.2 The Company shall promptly upon becoming aware that the Company must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the relevant Noteholder accordingly. Similarly, a Noteholder shall notify the Company on becoming so aware in respect of a payment payable to that Noteholder.
6.3 If the Company is required to make a Tax Deduction, it will make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
6.4 Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Company shall deliver to the Noteholder entitled to the payment evidence reasonably satisfactory to that Noteholder that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
6.5 All amounts set out or expressed to be payable to a Noteholder shall be deemed to be exclusive of any Indirect Tax. If any Indirect Tax is chargeable on any supply made by any Noteholder to the Company in connection with this Deed, the Company shall pay to that Noteholder (in addition to and at the same time as paying the consideration) an amount equal to the amount of the Indirect Tax.
6.6 Where the Company is required to reimburse or indemnify a Noteholder for any costs or expenses, the Company shall also at the same time pay and indemnify that Noteholder against all Indirect Tax incurred by that Noteholder in respect of the costs or expenses to the extent that that Noteholder reasonably determines that it is not entitled to credit or repayment in respect of the Indirect Tax.
6.7 Each party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no party shall be required to increase any payment in respect of which it makes such a FATCA Deduc...
Tax gross-up. (a) Each Obligor must make all payments to be made by it under the Finance Documents without any Tax Deduction, unless a Tax Deduction is required by law.
(b) If:
(i) a Lender is not, or ceases to be, a Qualifying Lender; or
(ii) an Obligor or a Lender or an Issuing Bank is aware that an Obligor must make a Tax Deduction (or that there is a change in the rate or the basis of a Tax Deduction), it must promptly notify the Facility Agent. The Facility Agent must then promptly notify the affected Parties.
(c) Except as provided below, if a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from the Obligor will be increased to an amount which (after making the Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.
(d) Except as provided below, an Obligor is not required to make an increased payment under paragraph (c) above for a Tax Deduction in respect of the tax imposed by the UK:
(i) if on the date on which the payment in respect of which the Tax Deduction is required falls due, the payment could have been made to the relevant Lender without a Tax Deduction if it was, or had not ceased to be, a Qualifying Lender, but on that date that Lender is not, or ceased to be, a Qualifying Lender in respect of that Obligor; or
(ii) to a Lender which is a Qualifying Lender solely because it is a UK Non-Bank Lender if:
(A) an officer of HM Revenue and Customs has given (and not revoked) a direction under section 931 of the ITA 2007 (as that provision has effect on the date on which the relevant Lender became a party to this Agreement) which relates to the relevant payment;
(B) the Lender has received from that Obligor a certified copy of that direction; and
(C) the payment could have been made to the Lender without any Tax Deduction in the absence of that direction; or
(iii) if that Lender is a Treaty Lender and the Obligor making the payment is able to demonstrate that the Tax Deduction would not have been required if the Lender had complied with its obligations under paragraph (h) below.
(e) Paragraph (d)(i) above will not apply if the Lender has ceased to be a Qualifying Lender in respect of that Obligor by reason of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration or application of) any law or Treaty or any published practice or concession of any relevant taxing authority.
(f) If an Obligor is required to...
Tax gross-up. Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
Tax gross-up. If notwithstanding the manner in which payments described in Section 13.01(a) were reported, there is a Tax liability or an adjustment to a Tax liability of a Company as a result of its receipt of a payment pursuant to this Agreement or the Separation and Distribution Agreement, such payment shall be appropriately adjusted so that the amount of such payment, reduced by the amount of all Income Taxes payable with respect to the receipt thereof (but taking into account all correlative Tax Benefits resulting from the payment of such Income Taxes), shall equal the amount of the payment that the Company receiving such payment would otherwise be entitled to receive.
Tax gross-up. 1. Each Registered Participant must make all payments to be made by it under the Allocation Rules without any tax deduction, unless a tax deduction is required by law.
2. If a tax deduction is required by law to be made by a Registered Participant, the amount of the payment due from the Registered Participant to the Allocation Platform will be increased to an amount which (after making the tax deduction) leaves an amount equal to the payment which would have been due if no tax deduction had been required.
3. Paragraph 2 of this Article does not apply with respect to any tax assessed on the Allocation Platform on any payment received in connection with the Allocation Rules under the laws of the jurisdiction in which the Allocation Platform is incorporated or, if different, the jurisdiction (or jurisdictions) in which the Allocation Platform is treated as resident for tax purposes or has or is deemed for tax purposes to have a permanent establishment or a fixed place of business to which any payment under the Allocation Rules is attributable. Paragraph 2 of this Article does not apply to value added tax as provided for in the VAT directive 2006/112/EC as amended from time to time and any other tax of a similar nature.