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GMSLA Anatomy™
In a Nutshell™ Clause 12:
12.1. Withholding, gross up and provision of information: Payments under this Agreement must be made without Tax deduction unless it is required by Applicable Law.
12.2 if the paying Party is required to deduct Tax, it must:
- (a) promptly notify the Recipient;
- (b) pay the full Tax amount required to the relevant authority;
- (c) provide the Recipient with evidence of such payment to such authorities; and
- (d) other than for manufactured payments in respect of Non-Cash Collateral, gross up the payment so the Recipient receives what it would have received had the deduction not been required; provided Payer need not gross up any amount if it would not have had to deduct had Recipient provided information required under paragraph 12.3.
12.3 Each Party must upon written demand deliver to the other Party any tax documents and otherwise assist as the other Party reasonably requires to enable it to make payments with as little withholding or deduction as possible (as long as doing so would not materially prejudice its legal or commercial position). Any documents must be accurate, complete, on time and appropriately certified to the receiving Party’s reasonable satisfaction.
12.4 Stamp Tax: Borrower must promptly account for any Stamp Tax chargeable on any transaction effected under this Agreement (that would not be chargeable but for Lender’s failure to comply with its obligations under this Agreement).
12.5 Borrower indemnifies Lender against liabilities it suffers because Borrower failed to comply with paragraph 12.4.
12.6 Sales Tax. All sums payable under this Agreement are exclusive of Sales Taxes and the relevant Party must in each case pay applicable Sales Tax by upon receipt of an suitable invoice.
12.7 Retrospective changes in law: Amounts payable under this Agreement must determined by reference to Applicable Law when the payment is made, and must not be adjusted for:
- (a) any retrospectives change in Applicable Law enacted after the relevant payment date; or
- (b) any court decision made after the relevant payment date (other that one specifically concerning this Agreement).
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2010 GMSLA full text of Clause 12:
12. Taxes
12.1. Withholding, gross up and provision of information: All payments under this Agreement shall be made without any deduction or withholding for or on account of any Tax unless such deduction or withholding is required by any Applicable Law.
12.2 Except as otherwise agreed, if the paying Party is so required to deduct or withhold, then that Party (Payer) shall:
- (a) promptly notify the other Party (Recipient) of such requirement;
- (b) pay or otherwise account for the full amount required to be deducted or withheld to the relevant authority;
- (c) upon written demand of Recipient, forward to Recipient documentation reasonably acceptable to Recipient, evidencing such payment to such authorities; and
- (d) other than in respect of any payment made by Lender to Borrower under paragraph 6.3, pay to Recipient, in addition to the payment to which Recipient is otherwise entitled under this Agreement, such additional amount as is necessary to ensure that the amount actually received by Recipient (after taking account of such withholding or deduction) will equal the amount Recipient would have received had no such deduction or withholding been required; provided Payer will not be required to pay any additional amount to Recipient under this sub paragraph (d) to the extent it would not be required to be paid but for the failure by Recipient to comply with or perform any obligation under paragraph 12.3.
12.3 Each Party agrees that it will upon written demand of the other Party deliver to such other Party (or to any government or other Taxing authority as such other Party directs), any form or document and provide such other cooperation or assistance as may (in either case) reasonably be required in order to allow such other Party to make a payment under this Agreement without any deduction or withholding for or on account of any Tax or with such deduction or withholding at a reduced rate (so long as the completion, execution or submission of such form or document, or the provision of such cooperation or assistance, would not materially prejudice the legal or commercial position of the Party in receipt of such demand). Any such form or document shall be accurate and completed in a manner reasonably satisfactory to such other Party and shall be executed and delivered with any reasonably required certification by such date as is agreed between the Parties or, failing such agreement, as soon as reasonably practicable.
12.4 Stamp Tax: Unless otherwise agreed, Borrower hereby undertakes promptly to pay and account for any Stamp Tax chargeable in connection with any transaction effected pursuant to or contemplated by this Agreement (other than any Stamp Tax that would not be chargeable but for Lender’s failure to comply with its obligations under this Agreement).
12.5 Borrower shall indemnify and keep indemnified Lender against any liability arising as a result of Borrower’s failure to comply with its obligations under paragraph 12.4.
12.6 Sales Tax. All sums payable by one Party to another under this Agreement are exclusive of any Sales Tax chargeable on any supply to which such sums relate and an amount equal to such Sales Tax shall in each case be paid by the Party making such payment on receipt of an appropriate Sales Tax invoice.
12.7. Retrospective changes in law: Unless otherwise agreed, amounts payable by one Party to another under this Agreement shall be determined by reference to Applicable Law as at the date of the relevant payment and no adjustment shall be made to amounts paid under this Agreement as a result of:
- (a) any retrospective change in Applicable Law which is announced or enacted after the date of the relevant payment; or
- (b) any decision of a court of competent jurisdiction which is made after the date of the relevant payment (other than where such decision results from an action taken with respect to this Agreement or amounts paid or payable under this Agreement).
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