PRC Taxes means any Taxes of Cross Dongguan for any taxable period (including, for the avoidance of doubt, any Straddle Period, Pre-Closing Tax Period or PostClosing Tax Period) arising out of or related to the difference between the amounts reflected as payables and receivables on Chinese statutory books of account of Cross Dongguan (the "Statutory Books") and amounts reflected as payables and receivables in the Chinese foreign exchange currency control system (the "FX Control System") with respect to Cross Dongguan, in each case on the Closing Date (including, any Taxes as a result of a Chinese Taxing Authority claiming that the account payable on the Statutory Books should be reduced to match the account payable in the FX Control System).
For the avoidance of doubt, the term "Tax Liabilities" shall include any and all liability for PRC Taxes suffered by any of the Indemnified Parties as a result of the payments described in clause (x) above, including without limitation, any liability for withholding Taxes.
For the avoidance of doubt, the term "Tax Liabilities" shall include any and all liability for PRC Taxes arising from or attributable to the receipt of Merger Consideration or Holdco Shares as described in clause (i) above, including without limitation, any liability for withholding Taxes and any liability associated with any PRC Governmental Authority denying a stepped up basis equal to the amount of the Merger Consideration received by such Shareholder or its Affiliates.
Each of Parent, the Surviving Corporation and the Paying Agent shall be entitled to deduct and withhold from the amounts otherwise payable pursuant to this Article III to any Shareholder such amounts as it may be required to deduct and withhold with respect to the making of such payment, provided that no amount shall be withheld in respect of PRC Taxes.
Covered Tax means with respect to the transactions contemplated hereunder, any and all PRC Taxes that are payable as a result of the application of PRC Circular 698 to such transactions and any and all PRC Taxes that are in the nature of capital gains levied on such transactions.
Seller and the Shareholders shall be responsible for and shall timely pay any liability of Seller, the Shareholders, the Company or Kingstone Semiconductor for Hong Kong or PRC Taxes resulting from the sale by Seller to Buyer of the Seller Stock, including any such Taxes payable according to the Transfer Tax Notice.