Tax - 1992 ISDA Provision

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1992 ISDA Master Agreement
A Jolly Contrarian owner’s manual™

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Section Tax in a Nutshell

Use at your own risk, campers!
Tax” means any tax of any kind (including interest or penalties added to it) imposed by a taxing authority on any payment under this Agreement other than a Stamp Tax.

Full text of Section Tax

Tax” means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including interest, penalties and additions thereto) that is imposed by any government or other taxing authority in respect of any payment under this Agreement other than a stamp, registration, documentation or similar tax.

Related agreements and comparisons

Related Agreements
Click here for the text of Section Tax in the 2002 ISDA
They’re the same! No comparison necessary!

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Content and comparisons

The 1992 ISDA and 2002 ISDA versions are identical. “Tax” features in the ISDA Master Agreement as follows:

  • Section 4(a): To furnish specified information, including as regards (at 4(a)(iii)) any forms required to pay Tax without withholding, leading on to...
  • Section 2(d): All payments are made without withholding or deduction unless required by law, and (where withholding IS required by law and the Tax is an Indemnifiable Tax) a gross-up is required.
  • Section 4(e): Each party pays its own Stamp Tax on execution of the Agreement (and indemnifies the other party if its taxing jurisdiction imposes about a stampable amount on the other party)


Tax and Stamp Tax are meant to be mutually exclusive and both refer to duties levied on payments under the swap Transaction itself and not under hedges to it, so be careful when using them (especially in the context of delta-one synthetic equity swaps where the main stamp duty and capital gains issues accrue on Hedge Positions. For those you might want to introduce a conceopt like Local Taxes, or something similar.

Here’s what the ISDA Users’ guide has to say about Tax and Stamp Tax, in a footnote on page 58.

Tax” is defined in Section 14 as any tax, charge or other similar listed items, except a stamp, registration, documentation or similar tax (i.e., a “Stamp Tax” as defined in Section 14 of the 2002 Agreement).

Ok, so why leave out Stamp Tax?

If you compare this definition with the equivalent definition of Tax in the 2010 GMSLA you might find yourself idly wondering about this strange little exception, missing from the GMSLA, for Stamp Tax. I know I did. Interestingly (or not, depending on your perspective) the drafters of the 2002 ISDA neglected to make use of the opportunity to use the definition of “Stamp Tax” in place of the less elegant “stamp, registration, documentation or similar tax”. But this might be the reason for the carve-out: Stamp Tax has its own little representation in Section 4(e).


See also