Common use of Tax Equalization Calculation Clause in Contracts

Tax Equalization Calculation. As previously stated, the tax equalization settlements are prepared annually after the preparation of the executive’s tax returns, using final income and other relevant data, in order to: • Calculate and reconcile the executive’s final hypothetical tax responsibility; and • Allocate all actual Canadian taxes (and any USA taxes, if applicable) between the executive and BKC. Tax equalization calculations are prepared by the BKC-designated tax consultant to ensure consistency and proper application of BKC policy. The BKC-designated tax consultant will send BKC a copy of the summary tax data from the equalization for processing at the time the equalization is mailed or delivered to the executive. The tax equalization settlement usually results in an amount due to/from the executive. Any payments due to BKC from the executive must be settled within 30 days of the later of: • Receipt of the tax equalization calculation; or • Receipt of any refund due to the executive by the USA and/or Canadian taxing authorities. BKC also reserves the right to stop the payment of assignment allowances or deduct outstanding balances from bonus or termination payments in order to collect unpaid equalization balances. Actual Tax Return Balances Upon receipt of the completed tax returns, the executive is expected to pay any balance due. Conversely, if the actual returns generate a refund, the executive will collect the refund. Both balances due and refunds owed will be included as part of the tax equalization settlement (see above). BKC may, at its discretion, make direct payments to the taxing authorities on behalf of the executive for taxes owed when the tax is BKC’s responsibility, as determined by the tax equalization settlement.