U.K. Tax Deduction Clause Samples
A U.K. Tax Deduction clause sets out the obligations of parties when payments under a contract are subject to withholding or deduction for U.K. taxes. Typically, it requires the paying party to withhold the appropriate amount of tax from payments and remit it to the relevant tax authority, while also providing documentation to the receiving party. This clause ensures compliance with U.K. tax laws and clarifies how tax liabilities are managed between the parties, thereby preventing disputes and unexpected financial exposure related to tax withholdings.
U.K. Tax Deduction. A payment by a Loan Party incorporated in the United Kingdom shall not be increased under paragraph (a) above by reason of a U.K. Tax Deduction if, on the date on which the payment falls due:
(i) the payment could have been made to the relevant Lender without a Tax Deduction if the Lender had been a U.K. Qualifying Lender, but on that date that Lender is not or has ceased to be a U.K. Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or U.K. Treaty or any published practice or published concession of any relevant taxing authority; or
(ii) the relevant Lender is a U.K. Qualifying Lender solely by virtue of paragraph (b) of the definition of “U.K. Qualifying Lender” and:
(a) an officer of HM Revenue & Customs has given (and not revoked) a direction (a “Direction”) under section 931 of the U.K. ITA which relates to the payment and that Lender has received from the Loan Party making the payment or from the Company a certified copy of that Direction; and
(b) the payment could have been made to the Lender without any U.K. Tax Deduction if that Direction had not been made; or
(iii) the relevant Lender is a U.K. Qualifying Lender solely by virtue of paragraph (b) of the definition of “U.K. Qualifying Lender” and:
(a) the relevant Lender has not given a U.K. Tax Confirmation to the Company; and
(b) the payment could have been made to the Lender without any U.K. Tax Deduction if the Lender had given a U.K. Tax Confirmation to the relevant Loan Party, on the basis that the U.K. Tax Confirmation would have enabled such Loan Party to have formed a reasonable belief that the payment was an “excepted payment” for the purpose of section 930 of the U.K. ITA; or
(iv) the relevant Lender is a U.K. Treaty Lender and the Loan Party making the payment is able to demonstrate that the payment could have been made to the Lender without the U.K. Tax Deduction had that Lender complied with its obligations under paragraphs 2.18(g)(iii)(A), 2.18(g)(iii)(B) or 2.18(g)(iii)(C) (as applicable) below.
U.K. Tax Deduction. If any United Kingdom taxes are required, in the opinion of the relevant Borrower acting reasonably and in good faith, and based on written advice from an appropriately qualified UK tax advisor (a “UK Tax Advisor”) (such advice to be shared with the Lenders and the Administrative Agent on request), to be deducted or withheld from (i) a payment of interest by such Borrower or (ii) any payment in respect of a Guarantee, in each case under any Loan Document (a “UK Tax Deduction”), and such UK Tax Deduction is both (A) as a result of the identity or residence of any of the Loan Parties and/or any of the parties who grant Collateral under the Collateral Agreements and/or any of the parties who provide a Guarantee under the Guarantee Agreements, and (B) an Indemnified Tax, (an “Indemnified UK Tax Deduction”) the relevant Borrower, the Lenders and the Administrative Agent, in each case acting reasonably, shall negotiate in good faith to restructure the Loan Parties and/or the Collateral under this Agreement and/or the Collateral Agreements and/or the Guarantee Agreements (as required) and/or take any other reasonable actions either such that no Indemnified UK Tax Deduction is required or such that full relief or exemption from any obligation to make a UK Tax Deduction may be obtained (in the opinion of the relevant Borrower acting reasonably and in good faith, based on written advice from a UK Tax Advisor (such advice to be shared with the Lenders and the Administrative Agent on written request)). If an amendment or other modification to any Loan Document is required pursuant to this Section 2.17(g), the Lenders authorize the Administrative Agent to, and the Administrative Agent shall, enter into such amendments or modifications. If no agreement after such negotiation is reached by the end of three (3) months (or such longer period as may be agreed acting reasonably and in good faith and provided that such initial negotiation period shall (absent prior written agreement of the Administrative Agent in its discretion) be in no event shorter than three (3) months unless agreement on terms is reached) following the due date of the first payment giving rise to an Indemnified UK Tax Deduction, the Borrower may promptly (but in any event within ten (10) Business Days) give the Administrative Agent notice of its intention to prepay the Loans under Section 2.11(a), and its intention to terminate the outstanding Revolving Commitments under 2.09(b), and promptly thereafter ...
U.K. Tax Deduction. The UK Borrower is not required to pay an additional amount to the Administrative Agent and/or any Lender under Section 7.6(c) above in respect of a UK Tax Deduction, if on the date on which the payment falls due:
(i) the payment could have been made to the relevant Lender without a UK Tax Deduction if it were a Qualifying UK Lender, but on that date that Lender is not or has ceased to be a Qualifying UK Lender for reasons other than a Change of Law after it became a Lender under this Agreement; or
(ii) (A) the relevant Lender is a Qualifying UK Lender solely under subsection (ii) of the definition of Qualifying UK Lender (a “UK Non-Bank Lender”); (B) the Board of the Inland Revenue (of the United Kingdom) has given (and not revoked) a direction (a “Direction”) under section 349C of the Taxes Act (as that provision has effect on the date on which the relevant Lender became a party to this Agreement) which relates to that payment and that Lender has received from the UK Borrower a certified copy of that Direction; and (C) the payment could have been made to the Lender without any UK Tax Deduction in the absence of that Direction; or
(iii) the relevant Lender is a UK Non-Bank Lender and either it has not other than by reason of a Change of Law after the date of this Agreement given a UK Tax Confirmation to the UK Borrower making the payment or any UK Tax Confirmation previously given by such Lender to the UK Borrower is no longer correct other than by reason of a Change of Law after the date of this Agreement; or
(iv) the relevant Lender is a UK Treaty Lender and the UK Borrower is able to demonstrate that the payment could have been made to the Lender without the UK Tax Deduction had the Lender complied with its obligations under Section 7.7.3(b) below.
U.K. Tax Deduction. (i) A UK Borrower shall, promptly upon becoming aware that it must make a UK Tax Deduction (or that there is any change in the rate or the basis of a UK Tax Deduction) notify the Administrative Agent accordingly. Similarly, a Lender shall notify the Administrative Agent on becoming so aware in respect of a payment payable to that Lender. In addition, that L▇▇▇▇▇ shall promptly notify the Administrative Agent upon becoming aware that it has ceased to be a UK Qualifying Lender (as applicable). If the Administrative Agent receives such notification from a Lender it shall notify the UK Borrower.
(A) Subject to Section 3.6A(ii)(B) below, a UK Treaty Lender and a UK Borrower making a payment to which that UK Treaty Lender is entitled shall cooperate in completing any procedural formalities necessary for a UK Borrower to obtain authorization to make that payment without a UK Tax Deduction.
(1) A UK Treaty Lender becomes a party to this Credit Agreement on the day on which this Credit Agreement is entered into that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Credit Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence opposite its name at Schedule 2.1; and
(2) a UK Treaty Lender which becomes a party to this Credit Agreement after the day on which this Credit Agreement is entered into that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Credit Agreement, shall confirm its scheme reference number and jurisdiction of tax residence in the documentation which it executes on becoming a party to this Credit Agreement as a Lender, and having done so, that Lender shall be under no obligation pursuant to Section 3.6A(a)(ii)(A) above.
(iii) If a Lender has confirmed its scheme reference number and jurisdiction of tax residence in accordance with Section 3.6A(a)(ii)(B) above and:
(A) a UK Borrower making a payment to that Lender has not made a UK Borrower DTTP Filing in respect of that Lender; or
(B) a UK Borrower making a payment to that Lender has made a UK Borrower DTTP Filing in respect of that Lender but:
(1) that UK Borrower DTTP Filing has been rejected by HM Revenue & Customs;