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Tax Indemnification Agreement Template for Australia

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Key Requirements PROMPT example:

Tax Indemnification Agreement

"I need a Tax Indemnification Agreement to cover the sale of my manufacturing business to an overseas buyer, with specific protection against any historical tax liabilities arising from the past 5 years of operations in Queensland and New South Wales."

Document background
The Tax Indemnification Agreement is a crucial document in Australian business transactions where parties need to allocate responsibility for historical or future tax liabilities. It is commonly used in corporate acquisitions, business sales, restructurings, and joint ventures where one party needs protection against potential tax exposures. The agreement typically follows Australian tax legislation and commercial practice, detailing specific tax matters covered, claim procedures, and payment obligations. This document is essential when parties need certainty about who bears responsibility for tax liabilities, particularly in situations involving complex corporate structures or where significant tax risks have been identified during due diligence.
Suggested Sections

1. Parties: Identifies and defines the indemnitor (party providing tax indemnification) and indemnitee (party being indemnified)

2. Background: Explains the context and purpose of the tax indemnification, including relevant transaction details or corporate relationships

3. Definitions: Defines key terms including 'Tax', 'Tax Liability', 'Tax Authority', 'Indemnified Taxes', and other relevant terms

4. Scope of Indemnification: Clearly defines which tax liabilities are covered by the indemnification and for what time periods

5. Indemnification Obligations: Details the specific obligations of the indemnitor, including payment terms and timing

6. Claims Procedure: Outlines the process for making indemnification claims, including notice requirements and supporting documentation

7. Tax Authority Proceedings: Procedures for handling tax audits, assessments, and disputes with tax authorities

8. Payment Terms: Specifies timing, method, and currency of indemnification payments

9. Dispute Resolution: Procedures for resolving disputes between parties regarding the indemnification obligations

10. Governing Law and Jurisdiction: Specifies that Australian law governs and designates jurisdiction for disputes

Optional Sections

1. Tax Gross-Up: Provisions ensuring that indemnification payments themselves don't create additional tax liabilities

2. Third Party Claims: Procedures for handling tax claims involving third parties

3. Security Provisions: Requirements for security or collateral to guarantee indemnification obligations

4. Insurance Requirements: Provisions requiring tax liability insurance coverage

5. Survival Period: Specific timeframes for how long the indemnification obligations survive

6. Tax Returns and Records: Obligations regarding the preparation and maintenance of tax-related documentation

7. Assignment: Rules regarding the transfer or assignment of indemnification rights and obligations

8. Foreign Tax Provisions: Special provisions for cross-border tax implications

Suggested Schedules

1. Schedule A - Covered Tax Matters: Detailed list of specific tax liabilities, assessments, or periods covered by the indemnification

2. Schedule B - Calculation Methodology: Detailed methodology for calculating indemnification amounts, including any adjustments or exclusions

3. Schedule C - Claims Documentation: Templates and requirements for supporting documentation when making indemnification claims

4. Schedule D - Prior Tax Matters: List of known existing tax issues, audits, or assessments as of the agreement date

5. Appendix 1 - Notice Requirements: Detailed procedures and templates for providing notices under the agreement

6. Appendix 2 - Key Contacts: List of key personnel and their roles regarding tax matters and indemnification claims

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Relevant Industries

Financial Services

Mining and Resources

Real Estate

Manufacturing

Technology

Healthcare

Retail

Energy

Infrastructure

Professional Services

Telecommunications

Transport and Logistics

Relevant Teams

Legal

Finance

Tax

Treasury

Compliance

Risk Management

Corporate Development

Mergers & Acquisitions

Company Secretariat

Internal Audit

Relevant Roles

Chief Financial Officer

Tax Director

Finance Manager

Corporate Lawyer

Tax Manager

Financial Controller

Legal Counsel

Compliance Officer

Treasury Manager

Risk Manager

M&A Director

Corporate Development Manager

Tax Accountant

General Counsel

Company Secretary

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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