Indemnifiable Tax - ISDA Provision

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). (view template)

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). (view template)

Commentary

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:

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Indemnifiable Tax in a Nutshell™ _{(ISDA edition)}

An Indemnifiable Tax is any Tax that is not a Stamp Tax that is not a tax that would not be imposed if there were not a connection between the taxing authority’s jurisdiction and the recipient that did not 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).