Payee Tax Representation - ISDA Provision

In gory detail

1992 ISDA 3(f) Payee Tax Representations. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(f) is accurate and true. (view template)

2002 ISDA 3(f) Payee Tax Representations. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(f) is accurate and true. (view template)

Template:H1 The Payee Tax reps required by Tax depend on the nature of the Counterparty. A convenient grid is set out below (this is all my own work although based off a spreadsheet prepared by Tax).

US Tax Reps at a glance

Tax Reps For ISDA

The following were approved by Bonnie Tellgman in Jan 2012:

• US Person: Counterparty is a “U.S. person” for the purposes of the Internal Revenue Code of 1986 as amended.
• US Corporation: It is classified as a US Corporation for United States federal income tax purposes.
• Foreign Person: It is a “foreign person” for United States federal income tax purposes.
• Non US Branch of Foreign Person: Each branch is a non-US branch of a foreign person for US federal income tax purposes
• Non-Withholding Partnership:It is classified as a “non-withholding foreign partnership” for United States federal income tax purposes.
• Connected Payments: Each payment received or to be received by it under this Agreement will be effectively connected with its conduct of a trade or business within the United States.
• Non-Connected Payments: Each such payment received or to be received by it in connection with this Agreement will not be effectively connected with its conduct of a trade or business in the United States
• Tax Treaty Benefits: It is fully eligible for the benefits of the “Business Profits” or “Industrial and Commercial Profits” provision, the “Interest” provision or any “Other Income” provision of the Income Tax Convention between the United States and Counterparty’s Jurisdiction* with respect to any payment described in such provisions and received or to be received by it in connection with this Agreement and no such payment is attributable to a trade or business carried on by it through a permanent establishment in the United States.
• Public International Organisation: It is a public international organization that enjoys the privileges, exemptions and immunities as an international organization under the International Organizations Immunities Act (22 U.S.C. 288-288f).
• Withholding and Reporting: It will assume withholding and reporting for any payments (or portions of any payments) determined to be non-Effectively Connected income for United States federal income tax purposes.
• Monetary Policy: Its primary purpose for entering into this Agreement is to implement or effectuate its governmental, financial or monetary policy.
• Hire Act:

1. The flush language at the end of Section 2(d)(ii) (Obligations - Deduction or Withholding for Tax – Liability) of this Agreement is replaced in its entirety with the following:

"then, except to the extent Y has satisfied (including by making a payment to X pursuant to Section 2(d)(iii)) or then satisfies the liability resulting from such Tax, Y will promptly pay to X the amount of such liability (including any related liability for interest, but including any related liability for penalties only if Y has failed to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d))."

2. The following is added at the end of Section 2(d) as new section 2(d)(iii):

Additional Amendments related to Tax. The parties agree that solely as between Party A and Party B, the definitions and provisions contained in the ISDA 2010 Short Form HIRE Act Protocol published by the International Swaps and Derivatives Association, Inc. on November 30, 2010, including the Attachment thereto ("Short Form Protocol"), will be deemed to be incorporated herein, mutatis mutandis, as though such definitions and provisions were set out in full herein, with any such conforming changes as are necessary to deal with what would otherwise be inappropriate or incorrect cross references. The parties further agree that the Implementation Date (as such term is defined in the Short Form Protocol) shall be the date of execution of this Agreement.

• FATCA:

The following is added at the end of Section 2(d) as new section 2(d)(iv):

Foreign Account Tax Compliance Act. (a) For purposes of any Payer Tax Representation, the words “any tax from any payment” shall not include any tax imposed under Sections 1471 and 1472 of the Internal Revenue Code of 1986, as amended, (or the United States Treasury Regulations or other guidance issued thereunder) ("FATCA Withholding Tax"); and (b) the definition of “Indemnifiable Tax” shall not include any FATCA Withholding Tax.