Tax Indemnification Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Tax Indemnification Agreement

"I need a Tax Indemnification Agreement for a multinational technology company acquiring a UAE mainland company, with specific provisions for the new corporate tax regime and protection against any historical tax liabilities discovered after the closing date of March 1, 2025."

Document background
The Tax Indemnification Agreement is essential in UAE business transactions where parties need to allocate tax-related risks and responsibilities. This document has become increasingly important with the UAE's expanding tax framework, including the implementation of VAT in 2018 and the new corporate tax regime effective from June 2023. The agreement typically addresses both existing and potential future tax liabilities, providing mechanisms for handling tax claims and establishing clear indemnification obligations. It is commonly used in mergers and acquisitions, corporate restructurings, and significant commercial transactions where tax exposure needs to be clearly allocated between parties. The document must comply with UAE federal tax laws, including Federal Decree-Law No. (8) of 2017 on VAT and Federal Decree-Law No. (47) of 2022 on Corporate Tax.
Suggested Sections

1. Parties: Identification of the indemnitor and indemnitee, including full legal names and addresses

2. Background: Context of the agreement, underlying transaction or relationship giving rise to the tax indemnification obligation

3. Definitions: Key terms including 'Tax', 'Tax Authority', 'Tax Claim', 'Losses', 'Indemnified Taxes', and other relevant definitions under UAE law

4. Scope of Indemnification: Detailed description of the tax matters covered by the indemnification, including specific types of taxes under UAE law

5. Tax Indemnification Obligations: Core provisions detailing the indemnitor's obligations to pay, reimburse, or indemnify for covered tax liabilities

6. Procedure for Tax Claims: Process for handling tax claims, including notification requirements, control of proceedings, and cooperation obligations

7. Payment Terms: Timing and method of indemnification payments, including currency and payment mechanisms

8. Duration and Survival: Term of the agreement and survival provisions for tax claims arising after termination

9. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and governing law provisions specific to UAE

10. Notices: Format and procedures for giving notices under the agreement

11. General Provisions: Standard provisions including amendments, assignment, severability, and entire agreement clauses

Optional Sections

1. Tax Returns and Compliance: Include when parties need specific provisions regarding preparation and filing of tax returns

2. Cross-Border Tax Provisions: Include when transaction involves international elements or multiple jurisdictions

3. Free Zone Specific Provisions: Include when either party operates in UAE free zones with special tax treatment

4. VAT-Specific Provisions: Include detailed VAT handling when transaction involves significant VAT implications

5. Corporate Tax Provisions: Include specific provisions related to the new UAE corporate tax regime when relevant

6. Tax Insurance: Include when parties agree to maintain tax liability insurance

7. Third Party Rights: Include when tax indemnification may affect or benefit group companies or related parties

Suggested Schedules

1. Schedule 1 - Specific Indemnified Taxes: Detailed list of specific taxes, charges, and duties covered by the indemnification

2. Schedule 2 - Excluded Tax Matters: List of tax matters specifically excluded from the scope of indemnification

3. Schedule 3 - Claim Procedures: Detailed procedures for making and handling tax indemnification claims

4. Schedule 4 - Required Notices and Forms: Templates for notices and forms required under the agreement

5. Appendix A - Power of Attorney: Standard form of power of attorney for handling tax matters

6. Appendix B - Tax Jurisdictions: List of relevant tax jurisdictions and applicable tax rates/requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Financial Services

Real Estate

Manufacturing

Oil & Gas

Retail

Technology

Healthcare

Construction

Professional Services

Hospitality

Trading

Logistics

Free Zone Operations

Relevant Teams

Legal

Finance

Tax

Compliance

Treasury

Corporate Development

Risk Management

Mergers & Acquisitions

Executive Leadership

Corporate Governance

Relevant Roles

Chief Financial Officer

Tax Director

Finance Manager

Corporate Lawyer

Tax Counsel

Compliance Officer

Financial Controller

Treasury Manager

M&A Director

Risk Manager

Corporate Secretary

General Counsel

Managing Director

Chief Executive Officer

Head of Finance

Tax Consultant

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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