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Tax Indemnity Agreement Template for Hong Kong

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Key Requirements PROMPT example:

Tax Indemnity Agreement

"I need a Tax Indemnity Agreement governed by Hong Kong law for a share sale transaction closing in March 2025, where the seller will indemnify the buyer against all historical tax liabilities of a technology company operating in both Hong Kong and mainland China."

Document background
The Tax Indemnity Agreement is a crucial document in corporate transactions and restructurings under Hong Kong law, particularly in mergers, acquisitions, and corporate reorganizations. It is used when parties need to allocate responsibility for historical tax liabilities or potential future tax exposures. This agreement becomes especially important in transactions where the buyer seeks protection against pre-completion tax liabilities or where complex group structures necessitate clear delineation of tax responsibilities. The document typically includes detailed provisions on covered tax matters, claim procedures, and enforcement mechanisms, all structured within Hong Kong's legal framework and tax regime. The Tax Indemnity Agreement often complements other transaction documents and may be required by financial institutions or regulatory authorities in certain circumstances.
Suggested Sections

1. Parties: Identification of the indemnifier and indemnitee, including full legal names and addresses

2. Background: Context of the agreement, including the underlying transaction or relationship giving rise to potential tax liabilities

3. Definitions: Key terms including 'Tax', 'Tax Authority', 'Tax Liability', 'Claims', 'Losses', etc.

4. Scope of Indemnity: Detailed description of what tax liabilities are covered by the indemnity

5. Duration: Time period for which the indemnity remains valid, including any survival provisions

6. Payment Terms: Timing and mechanism for indemnity payments, including any requirements for evidence of tax liability

7. Claims Procedure: Process for making claims under the indemnity, including notice requirements and time limits

8. Conduct of Tax Matters: Rights and obligations regarding handling of tax audits, investigations, and disputes

9. Limitations on Liability: Any caps, exclusions, or limitations on the indemnifier's obligations

10. Dispute Resolution: Procedures for resolving disputes between parties regarding the indemnity

11. Governing Law and Jurisdiction: Confirmation of Hong Kong law as governing law and jurisdiction for disputes

Optional Sections

1. Multiple Jurisdictions: Additional provisions for handling tax matters in multiple jurisdictions, used when parties operate across different tax jurisdictions

2. Tax Gross-Up: Provisions ensuring payments are made free of any withholding or deduction for tax, used when cross-border payments are involved

3. Change in Law: Provisions addressing the impact of changes in tax legislation, used when long-term indemnities are contemplated

4. Assignment: Provisions regarding the ability to transfer rights under the indemnity, used when assignment rights are important to either party

5. Information Rights: Detailed provisions regarding access to tax information and records, used when complex tax matters are involved

6. Security: Provisions for security or collateral supporting the indemnity, used when additional protection is required

Suggested Schedules

1. Schedule 1 - Specific Tax Matters: Detailed list of specific tax matters or liabilities covered by the indemnity

2. Schedule 2 - Excluded Tax Matters: List of tax matters specifically excluded from the scope of the indemnity

3. Schedule 3 - Claims Procedures: Detailed procedures for making and processing claims under the indemnity

4. Schedule 4 - Form of Notice: Template form for giving notice of claims under the indemnity

5. Schedule 5 - Relevant Companies: List of companies covered by the indemnity if part of a group structure

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions




















































Clauses































Relevant Industries

Financial Services

Real Estate

Manufacturing

Technology

Energy

Infrastructure

Healthcare

Retail

Private Equity

Mining and Resources

Telecommunications

Professional Services

Relevant Teams

Legal

Finance

Tax

Treasury

Compliance

Risk Management

Corporate Development

Mergers & Acquisitions

Company Secretarial

Corporate Governance

Relevant Roles

Chief Financial Officer

Tax Director

Finance Director

Corporate Lawyer

Tax Manager

Financial Controller

Compliance Officer

Treasury Manager

Corporate Secretary

Risk Manager

Transaction Manager

M&A Director

General Counsel

Head of Legal

Tax Partner

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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