Template:Nutshell 2002 ISDA 2(d)(i): Difference between revisions

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{{isdaprov|2(d)(i)}} {{isdaprov|Gross-Up}}. All payments must be made without withholding unless it is required by law. In that case the payer must:
:{{isdaprov|2(d)(i)}} '''{{isdaprov|Gross-Up}}'''. The parties must pay without withholding unless required by law. Where a payer has to withhold, it must:—
:(1) promptly notify recipient;
::(1) promptly tell the recipient;
:(2) pay the amount required to the tax authorities;
::(2) promptly pay the withheld amount to the relevant authorities (including the withholding on any required {{isdaprov|gross-up}});
:(3) provide the recipient with evidence it has made the payment; and
::(3) give the recipient a receipt for the tax payment; and
:(4) where the withholding is an {{isdaprov|Indemnifiable Tax}}, gross the withholding up to the recipient.
::(4) gross up any {{isdaprov|Indemnifiable Tax}}, so that the recipient receives the amount it would otherwise have received (free of {{isdaprov|Indemnifiable Taxes}}). However, the payer need not gross up any [[Withholding tax|withholding]] that arose only because:—
A payer won't have to gross up where:
:::(A) the recipient did not provide Section {{isdaprov|4(a)}} tax information, or breached its {{isdaprov|Payee Tax Representations}}; or
:(1) the recipient failed to provide necessary information to process a rebate; or
:::(B) the recipient's {{isdaprov|Payee Tax Representations}} were not true (other than because of regulatory action taken ''after'' execution of the {{isdaprov|Transaction}} or a {{isdaprov|Change in Tax Law}}. <br>
:(2) its Section {{isdaprov|3(f)}} tax representations turned out to be wrong (unless that was brought about by a tax authority taking legal action or a {{isdaprov|Change in Tax Law}} after the {{isdaprov|Transaction}} was executed.

Latest revision as of 15:32, 19 September 2019

2(d)(i) Gross-Up. The parties must pay without withholding unless required by law. Where a payer has to withhold, it must:—
(1) promptly tell the recipient;
(2) promptly pay the withheld amount to the relevant authorities (including the withholding on any required gross-up);
(3) give the recipient a receipt for the tax payment; and
(4) gross up any Indemnifiable Tax, so that the recipient receives the amount it would otherwise have received (free of Indemnifiable Taxes). However, the payer need not gross up any withholding that arose only because:—
(A) the recipient did not provide Section 4(a) tax information, or breached its Payee Tax Representations; or
(B) the recipient's Payee Tax Representations were not true (other than because of regulatory action taken after execution of the Transaction or a Change in Tax Law.
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