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Tax Protection Agreement
"I need a Tax Protection Agreement for a cross-border acquisition closing on March 15, 2025, where our Canadian parent company is providing tax indemnification to a US subsidiary regarding potential historical tax liabilities in Ontario."
1. Parties: Identification of the parties to the agreement, including the tax indemnitor and indemnitee
2. Background: Context of the agreement, including the underlying transaction or relationship necessitating tax protection
3. Definitions: Detailed definitions of key terms including 'Tax Loss', 'Protected Taxes', 'Tax Authority', 'Tax Claim', etc.
4. Scope of Tax Protection: Clear delineation of which taxes and tax events are covered by the protection
5. Tax Indemnification: Core provisions detailing the mechanics and extent of tax protection and payment obligations
6. Notice Requirements: Procedures for notifying the indemnifying party of tax claims or assessments
7. Control of Tax Proceedings: Rights and obligations regarding the management of tax audits, disputes, and litigation
8. Payment Mechanics: Timing and method of indemnification payments, including treatment of tax benefits
9. Cooperation and Information Sharing: Obligations to provide tax information and assistance in tax matters
10. Duration and Survival: Term of the agreement and which provisions survive termination
11. Dispute Resolution: Procedures for resolving disputes between parties regarding the agreement
12. General Provisions: Standard contractual provisions including governing law, amendments, notices, etc.
1. International Tax Provisions: Required when agreement covers cross-border transactions or international tax implications
2. Provincial Tax Considerations: Needed when specific provincial tax matters require separate treatment
3. Tax Gross-Up Provisions: Optional section for cases where indemnification payments themselves may be taxable
4. Change in Law Provisions: Required when parties want to address the impact of future tax law changes
5. Tax Insurance Coordination: Needed when tax insurance is being used alongside the protection agreement
6. Third Party Rights: Required when tax protection extends to affiliated entities or other third parties
7. Tax Credit Trading: Optional section for agreements involving the transfer or sharing of tax credits
8. Straddle Period Provisions: Needed when tax protection covers periods straddling a specific transaction date
1. Schedule A - Protected Taxes: Detailed list of specific taxes covered by the agreement
2. Schedule B - Calculation Methodology: Specific methods for calculating tax losses and indemnification amounts
3. Schedule C - Excluded Tax Matters: List of specific tax issues or events explicitly excluded from protection
4. Schedule D - Pre-Existing Tax Issues: Known tax matters existing at time of agreement execution
5. Schedule E - Claim Procedures: Detailed procedures for making and processing indemnification claims
6. Appendix 1 - Form of Tax Claim Notice: Standard form for notifying indemnitor of tax claims
7. Appendix 2 - Required Tax Documentation: List of tax documents required for verification of claims
8. Appendix 3 - Authorized Representatives: List of individuals authorized to handle tax matters under the agreement
Authors
Financial Services
Manufacturing
Real Estate
Energy and Resources
Technology
Healthcare
Professional Services
Retail and Consumer Goods
Transportation and Logistics
Mining and Natural Resources
Infrastructure
Private Equity
Telecommunications
Legal
Finance
Tax
Treasury
Corporate Development
Mergers & Acquisitions
Risk Management
Compliance
Corporate Governance
Financial Planning & Analysis
Chief Financial Officer
Tax Director
Corporate Lawyer
Tax Manager
Finance Director
Treasury Manager
Financial Controller
Mergers & Acquisitions Director
Corporate Development Officer
Risk Manager
Tax Counsel
Finance Manager
Compliance Officer
Chief Legal Officer
Transaction Advisory Director
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