Indemnifiable Tax - ISDA Provision
2002 ISDA Master Agreement
From our machine overlords
Full text of Section Indemnifiable Tax
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Now you would like to think ISDA’s crack drafting squad™ could do something to improve a passage with a quintuple negative, wouldn’t you? Even, if, bloody-mindedly, to add a sixth negative, just to underline how scanty is the damn they give about the neurotic whinings of those, like the JC who hanker for more economical expression. In your face, prose stylists, such a stance might say. Actually, since I’m here, have a fricking seventh negative, punk, and brand it on your forehead so all who look upon you will know who it was who schooled you.
We can but dream, possums. We can only imagine what might have been. but no; they left the ghastly tract inviolate.
But HAL 9000 is coming. The JC fed this language into the “OpenAI” text generator, and asked for a summary that a second grader (in old money, an eight-year-old) could understand and, well, the outcome is impressive:
Indemnifiable Tax is a kind of tax that is different from other taxes. It is a tax that is only imposed when someone is connected to the country or state that imposes the tax. This connection could be because the person is from the country, does business there, or has gotten money from there.
Summary
Negatives, negatives, everywhere
Without wishing to be overly negative[6], this one truly comes from the "wow" file in indefensible drafting:
- ... other than a tax which would not be imposed but for...
Not only a triple negative, but since the squad’s definition of Tax already contains a negative (being any tax that isn’t a Stamp Tax) and “Indemnifiable Tax” is itself often used in the negative (e.g. “a tax which is not an Indemnifiable Tax”) — or even double negative (e.g. “other than a tax which is not an Indemnifiable Tax”) in the body of the ISDA Master Agreement. That makes it a sextuple negative. Beat that ISLA.
General discussion
Stamp Taxes are not Indemnifiable Taxes
Stamp Taxes are not Indemnifiable Taxes. They are covered by Section 4(e) and not the general gross-up in Section 2(d). They are not covered by Payee Tax Representations.
See also
- Section 2(d) (Deduction or Withholding for Tax).
References