82,853
edits
Liability (for withholding) - ISDA Provision: Difference between revisions
Liability (for withholding) - ISDA Provision (view source)
Revision as of 15:16, 19 September 2019
, 19 September 2019no edit summary
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 4: | Line 4: | ||
The best guess we’ve seen comes from our old friend, the tiresome [[FT book about derivatives]], whose learned author contends that it addresses the time where a {{isdaprov|Payer}} makes a payment gross, relying in [[good faith]] on a {{isdaprov|Payee Tax Representation}} that the {{isdaprov|Payee}} is entitled to receive gross, only to then find that the {{isdaprov|Tax}}ing authority in question requires the {{isdaprov|Payer}} to make that payment net, and account to it for the {{isdaprov|Tax}}, after all. In this case the {{isdaprov|Payer}} can require the {{isdaprov|Payee}} to [[indemnify]] it for the payment, interest and penalties. | The best guess we’ve seen comes from our old friend, the tiresome [[FT book about derivatives]], whose learned author contends that it addresses the time where a {{isdaprov|Payer}} makes a payment gross, relying in [[good faith]] on a {{isdaprov|Payee Tax Representation}} that the {{isdaprov|Payee}} is entitled to receive gross, only to then find that the {{isdaprov|Tax}}ing authority in question requires the {{isdaprov|Payer}} to make that payment net, and account to it for the {{isdaprov|Tax}}, after all. In this case the {{isdaprov|Payer}} can require the {{isdaprov|Payee}} to [[indemnify]] it for the payment, interest and penalties. | ||
This seems a stretch — the usually fulsome<ref>Did I say fulsome? Tiresome.</ref> prose of the {{isdama}} neglects in this case to say anything about {{isdaprov|Payee Tax Representations}}, right or wrong, much less the {{isdaprov|Payer}}’s legitimate reliance on them. It seems to say if the [[Payer]], whether through blameless inadvertence or stupidity, neglects to account for a tax it was obliged to account for, the poor old Payee has to cover. | This seems a stretch (though probably one cribbed from the 2002 User’s Guide<ref>It says “... no [[gross-up]] is required if the payee has made a {{isdaprov|Payee Tax Representation}} that was false when made or later becomes false (unless it becomes false as a result of a {{isdaprov|Change in Tax Law}} or similar legal development”</ref>) — the usually fulsome<ref>Did I say fulsome? Tiresome.</ref> prose of the {{isdama}} neglects in this case to say anything about {{isdaprov|Payee Tax Representations}}, right or wrong, much less the {{isdaprov|Payer}}’s legitimate reliance on them. It seems to say if the [[Payer]], whether through blameless inadvertence or stupidity, neglects to account for a tax it was obliged to account for, the poor old Payee has to cover. | ||
But on the other hand, it is hard to think of a better explanation. So, go [[FT book about derivatives|Paul C. Harding]]!!! | But on the other hand, it is hard to think of a better explanation. So, go [[FT book about derivatives|Paul C. Harding]]!!! | ||