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Tax Indemnification Agreement
"I need a Tax Indemnification Agreement under German law for our upcoming acquisition of a manufacturing company, where the seller will indemnify us against all tax liabilities arising before March 2025, with specific provisions for ongoing tax audits."
1. Parties: Identification of the indemnitor and indemnitee, including full legal names and addresses
2. Background: Context of the agreement, including the underlying transaction or relationship giving rise to the tax indemnification obligation
3. Definitions: Key terms used throughout the agreement, including 'Tax', 'Tax Authority', 'Tax Claim', 'Losses', and 'Indemnification Period'
4. Scope of Indemnification: Detailed description of the tax matters covered by the indemnification, including specific types of taxes and time periods
5. Indemnification Obligations: Core obligations of the indemnitor, including payment terms, timing, and method of payment
6. Tax Claims Procedures: Process for handling tax claims, including notification requirements, control of proceedings, and cooperation obligations
7. Limitations: Temporal and monetary limitations on indemnification obligations, including caps and thresholds
8. Payment and Reimbursement: Procedures for making indemnification payments and handling reimbursements of tax refunds
9. Dispute Resolution: Procedures for resolving disputes between parties regarding indemnification obligations
10. Term and Termination: Duration of the agreement and circumstances under which it may be terminated
11. Governing Law and Jurisdiction: Specification of German law as governing law and designation of competent courts
12. Miscellaneous: Standard provisions including notices, amendments, assignments, and severability
1. Tax Gross-Up: Additional provisions for grossing up payments to account for taxes on indemnification payments themselves, used when parties want to ensure net receipt amounts
2. Third-Party Claims: Specific procedures for handling tax claims involving third parties, included when third-party interactions are likely
3. Security Provisions: Requirements for security or collateral to secure indemnification obligations, used for high-value or high-risk indemnifications
4. Tax Return Preparation: Provisions regarding the preparation and review of relevant tax returns, included when ongoing tax filing obligations exist
5. Special Tax Matters: Provisions addressing specific tax issues unique to the transaction or parties, used when particular tax risks are identified
6. Insurance Requirements: Obligations to maintain specific insurance coverage related to tax liabilities, included for additional security
7. Survival: Specific provisions about which obligations survive termination, used when different survival periods are needed for different obligations
1. Schedule of Covered Taxes: Detailed list of specific taxes, tax periods, and jurisdictions covered by the indemnification
2. Schedule of Known Tax Issues: List of existing tax matters, ongoing audits, or known potential tax risks
3. Schedule of Excluded Matters: Specific tax matters explicitly excluded from the scope of indemnification
4. Schedule of Contact Persons: List of designated representatives for tax matters and their contact information
5. Appendix A - Tax Claim Procedures: Detailed procedures and timelines for handling tax claims and investigations
6. Appendix B - Calculation Methods: Specific methodologies for calculating indemnification amounts and gross-up payments
Authors
Financial Services
Manufacturing
Real Estate
Technology
Energy
Healthcare
Retail
Professional Services
Transportation
Construction
Private Equity
Insurance
Telecommunications
Legal
Finance
Tax
Treasury
Compliance
Risk Management
Corporate Development
Mergers & Acquisitions
Due Diligence
Internal Audit
Tax Director
Chief Financial Officer
Corporate Counsel
Tax Manager
Finance Director
Mergers & Acquisitions Director
Risk Manager
Treasury Manager
Financial Controller
Compliance Officer
Legal Counsel
Corporate Secretary
Head of Tax
Transaction Manager
Due Diligence Specialist
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