In gory detail
1992 ISDA
“Indemnifiable Tax” means any Tax other than a Tax that would not be imposed in respect of a payment under this Agreement but for a present or former connection between the jurisdiction of the government or taxation authority imposing such Tax and the recipient of such payment or a person related to such recipient (including, without limitation, a connection arising from such recipient or related person being or having been a citizen or resident of such jurisdiction, or being or having been organised, present or engaged in a trade or business in such jurisdiction, or having or having had a permanent establishment or fixed place of business in such jurisdiction, but excluding a connection arising solely from such recipient or related person having executed, delivered, performed its obligations or received a payment under, or enforced, this Agreement or a Credit Support Document).
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2002 ISDA
“Indemnifiable Tax” means any Tax other than a Tax that would not be imposed in respect of a payment under this Agreement but for a present or former connection between the jurisdiction of the government or taxation authority imposing such Tax and the recipient of such payment or a person related to such recipient (including, without limitation, a connection arising from such recipient or related person being or having been a citizen or resident of such jurisdiction, or being or having been organised, present or engaged in a trade or business in such jurisdiction, or having or having had a permanent establishment or fixed place of business in such jurisdiction, but excluding a connection arising solely from such recipient or related person having executed, delivered, performed its obligations or received a payment under, or enforced, this Agreement or a Credit Support Document).
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You may marvel at the triple negative here. Especially since the expression Indemnifiable Tax is often used in the negative (ie "a tax which is not an Indemnifiable Tax") - and even double negative (ie "other than a tax which is not an Indemnifiable Tax") in the body of the ISDA Master Agreement. That makes it a quintuple negative. Quite a literary feat.
A need to know version is this:
Indemnifiable Tax in a Nutshell™ (ISDA edition)
An Indemnifiable Tax is any Tax that is not[1] a Stamp Tax that is not[2] a tax that would not[3] be imposed if there were not[4] a connection between the taxing authority’s jurisdiction and the recipient that did not[5] arise solely from the recipient having performed any part of this Agreement in that jurisdiction.
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Withholding under ISDA
See Also
See in particular Section 2(d) (Deduction or Withholding for Tax).
- ↑ Negative 1
- ↑ negative 2
- ↑ negative 3
- ↑ negative 4
- ↑ negative 5