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Tax Sharing Agreement

Tax Sharing Agreement Template for India

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Key Requirements PROMPT example:

Tax Sharing Agreement

"I need a Tax Sharing Agreement between the Maharashtra State Government and Mumbai Municipal Corporation, effective from March 1, 2025, covering GST revenue sharing and local body tax distribution, with quarterly settlement periods."

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Document background
A Tax Sharing Agreement is essential in India's complex federal tax structure where multiple authorities have taxation powers. This document is typically used when establishing arrangements for sharing tax revenues between different levels of government, in public-private partnerships, or in special economic zones. The agreement must comply with constitutional provisions governing tax distribution between the Centre and States, various taxation laws including GST, and local body regulations. It includes detailed mechanisms for tax collection, distribution formulas, compliance requirements, reporting obligations, and dispute resolution procedures. The document becomes particularly important in scenarios involving multi-jurisdictional operations, infrastructure projects, or when establishing new administrative arrangements for tax sharing.
Suggested Sections

1. Parties: Identification of the parties entering into the agreement, including their legal status and authority

2. Background: Context of the tax sharing arrangement and the basis for entering into the agreement

3. Definitions: Detailed definitions of terms used in the agreement, including specific tax-related terminology

4. Scope of Agreement: Specification of taxes covered and territorial jurisdiction

5. Tax Sharing Formula: Core mechanism and methodology for sharing tax revenue

6. Collection and Distribution: Procedures for tax collection and distribution between parties

7. Timing and Payment: Schedule and mechanism for transfers of tax revenue

8. Accounting and Records: Requirements for maintaining proper accounts and records of tax collection and distribution

9. Reporting Requirements: Obligations for regular reporting of tax collection and distribution

10. Audit Rights: Provisions for audit of tax collection and distribution records

11. Compliance: Obligations regarding tax laws and regulations compliance

12. Dispute Resolution: Mechanism for resolving disputes related to tax sharing

13. Term and Termination: Duration of agreement and conditions for termination

14. Governing Law: Applicable laws and jurisdiction

15. General Provisions: Standard contractual provisions including notices, amendments, and severability

Optional Sections

1. Special Economic Zones: Special provisions for tax sharing in SEZs, include when SEZ territories are involved

2. Interstate Considerations: Additional provisions for interstate tax implications, include when multiple states are involved

3. Digital Commerce: Specific provisions for e-commerce and digital transactions, include for digital business operations

4. Force Majeure: Provisions for extraordinary circumstances affecting tax collection, include for longer-term agreements

5. Transition Provisions: Procedures for transitioning from previous arrangements, include when replacing existing agreements

6. Tax Incentives: Provisions for sharing tax incentives or exemptions, include when specific tax benefits are involved

Suggested Schedules

1. Schedule A - Tax Sharing Calculations: Detailed formulas and methods for calculating tax shares

2. Schedule B - Covered Taxes: Comprehensive list of taxes covered under the agreement

3. Schedule C - Collection Procedures: Detailed procedures for tax collection and reconciliation

4. Schedule D - Reporting Formats: Templates and formats for regular reporting

5. Schedule E - Key Contacts: List of key personnel and their roles in tax administration

6. Appendix 1 - Compliance Checklist: Checklist of compliance requirements and deadlines

7. Appendix 2 - Document Requirements: List of required documentation for tax collection and distribution

8. Appendix 3 - Historical Data: Previous tax collection and distribution data if applicable

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreed Share
Applicable Laws
Applicable Taxes
Assessment Period
Business Day
Central Taxes
Collection Period
Commencement Date
Compliance Requirements
Distribution Formula
Distribution Period
Effective Date
Eligible Revenue
Financial Year
Force Majeure Event
GST
IGST
Implementation Date
Local Body Taxes
Net Revenue
Participating Authorities
Payment Date
Quarterly Statement
Reconciliation Period
Reference Period
Relevant Authority
Revenue Pool
SGST
Sharing Mechanism
State Taxes
Tax Assessment
Tax Collection
Tax Distribution
Tax Incentives
Tax Period
Tax Records
Tax Revenue
Tax Year
Taxable Territory
Territory
Transfer Date
Clauses
Interpretation
Definitions
Tax Collection
Revenue Sharing
Payment Terms
Distribution Mechanism
Accounting and Records
Audit Rights
Compliance
Reporting Requirements
Confidentiality
Force Majeure
Dispute Resolution
Governing Law
Jurisdiction
Representations and Warranties
Covenants
Indemnification
Term and Termination
Amendment and Modification
Notices
Assignment
Severability
Entire Agreement
Authority and Capacity
Tax Compliance
Record Keeping
Information Sharing
Performance Obligations
Default and Remedies
Relevant Industries

Government and Public Sector

Financial Services

Tax Advisory

Legal Services

Manufacturing

Information Technology

Infrastructure

Real Estate

Special Economic Zones

Retail and Commerce

Relevant Teams

Legal

Finance

Tax

Compliance

Treasury

Government Relations

Public Affairs

Regulatory Affairs

Accounting

Internal Audit

Relevant Roles

Tax Director

Chief Financial Officer

Financial Controller

Tax Manager

Legal Counsel

Compliance Officer

Government Relations Manager

Public Finance Officer

Treasury Manager

Tax Consultant

Municipal Commissioner

State Finance Secretary

Revenue Officer

Joint Commissioner of Taxes

Finance Director

Industries
Constitution of India - Article 246: Defines the distribution of legislative powers between Union and State governments regarding taxation
Constitution of India - Article 268-293: Details the distribution of revenue between Union and States
Central Goods and Services Tax Act, 2017: Governs the central GST component and its sharing mechanisms
Integrated Goods and Services Tax Act, 2017: Regulates inter-state transactions and related tax sharing
State Goods and Services Tax Acts: State-specific GST laws that affect tax collection and distribution
Income Tax Act, 1961: Governs direct taxation and its distribution mechanisms
Finance Commission Act, 1951: Establishes framework for tax distribution recommendations between Centre and States
Special Economic Zones Act, 2005: Contains special provisions for tax treatment in SEZs
Municipal Corporation Acts: Local body laws affecting tax collection and sharing at municipal level
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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