Tax Benefit Allocation Sample Clauses
The Tax Benefit Allocation clause defines how tax benefits, such as deductions, credits, or allowances arising from a transaction or arrangement, are distributed among the parties involved. Typically, this clause specifies the method for calculating and assigning these benefits, often based on each party’s contribution, ownership percentage, or other agreed-upon criteria. Its core practical function is to ensure that all parties receive their fair share of tax advantages, thereby preventing disputes and promoting transparency in the allocation of tax-related savings.
Tax Benefit Allocation. (a) The Shareholders hereby acknowledge that (i) before the Chilean Effective Time certain Bank Shares owned by the Companies had, either totally or partially, the exemption on capital gains set forth in Article 107 of the Chilean Income Tax Law entitling the holder of such Bank Shares to transfer them free of Chilean capital gains tax (the “Tax Entitlement”) and (ii) the Tax Entitlement remains in the Bank Shares held, directly or indirectly, by the Companies.
(b) The Shareholders (i) agree to use reasonable best efforts and cooperate so that the provisions set forth in this Agreement (including without limitation with respect to any Transfer contemplated by Section 3.6) are implemented in a manner that allows the Shareholders to use the Tax Entitlement and (ii) shall consider all mechanisms available at such time to allow a Shareholder to use the Tax Entitlement or mitigate in any way the overall tax result of the implementation of such provisions; provided that such efforts shall neither alter the economic substance of the provisions of this Agreement nor generate a detrimental tax effect on the other Shareholder.