Corporation tax clause: Copy, customize, and use instantly
Introduction
A corporation tax clause outlines the responsibility of the parties regarding the payment of corporation tax and ensures that tax liabilities are properly accounted for within the scope of the agreement. This clause establishes who is responsible for the taxes due under the Agreement and how they will be treated, helping both parties to understand their obligations and avoid any disputes related to tax liabilities.
Below are templates for corporation tax clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard corporation tax clause
This version includes general corporation tax responsibilities.
The [Company] agrees to pay all corporation tax liabilities arising from its income and activities under this Agreement. The [Investor] is not liable for the payment of any corporation tax due on the [Company]’s income, profits, or earnings, except as otherwise specified in this Agreement.
Corporation tax clause with withholding tax obligation
This version includes withholding tax obligations.
The [Investor] agrees to withhold any applicable withholding tax on payments made to the [Company] under this Agreement, as required by the relevant tax authority. The [Investor] will remit the withheld tax directly to the tax authorities on behalf of the [Company] and will provide the [Company] with proof of payment.
Corporation tax clause with VAT exemption for non-resident companies
This version includes VAT exemption for non-resident companies.
If the [Company] is a non-resident entity and the services provided under this Agreement are exempt from VAT, the [Investor] will not be required to pay VAT on such services. The [Company] agrees to provide the [Investor] with the necessary documentation to verify its VAT-exempt status.
Corporation tax clause with tax deductions for certain expenses
This version includes tax deductions for certain expenses.
The [Company] may deduct any reasonable and necessary business expenses incurred in the performance of services under this Agreement from its gross income for corporation tax purposes, subject to the applicable tax laws and regulations.
Corporation tax clause with tax compliance assurance
This version includes tax compliance assurance.
The [Company] warrants that it will comply with all applicable corporation tax laws and regulations throughout the term of this Agreement. The [Company] will provide evidence of its compliance upon request from the [Investor], including proof of tax filings and payments.
Corporation tax clause with tax indemnity
This version includes a tax indemnity.
The [Company] agrees to indemnify the [Investor] against any corporation tax liabilities, penalties, or interest arising from the [Company]’s failure to comply with applicable tax laws related to this Agreement. The indemnity covers any claims, costs, or expenses incurred by the [Investor] due to tax non-compliance.
Corporation tax clause with tax adjustment for changes in law
This version includes tax adjustments for changes in law.
If there are any changes in corporation tax law or the tax treatment of payments under this Agreement that result in additional tax liabilities for the [Investor] or the [Company], both parties agree to negotiate in good faith to adjust the terms of this Agreement to reflect the new tax laws.
Corporation tax clause with tax treatment of international payments
This version includes tax treatment for international payments.
If the [Company] is a foreign entity, the [Investor] agrees to comply with all applicable tax laws related to payments made to foreign entities under this Agreement. The [Investor] will be responsible for ensuring that all taxes, including withholding tax, are properly accounted for and remitted.
Corporation tax clause with payment of tax on behalf of the [Investor]
This version includes payment of tax on behalf of the [Investor].
The [Company] agrees to pay all corporation tax arising from the project on behalf of the [Investor] and will include the tax amount in the invoices submitted for payment. The [Investor] agrees to reimburse the [Company] for these amounts, along with any other costs incurred.
Corporation tax clause with tax payment timing
This version includes tax payment timing.
The [Company] will be responsible for the timely payment of any corporation tax due on its profits arising from this Agreement. The [Investor] agrees to make payments in accordance with the agreed-upon schedule, taking into account any tax payments due at that time.
Corporation tax clause with tax consequences of termination
This version includes tax consequences of termination.
If this Agreement is terminated for any reason, the parties will jointly assess the tax consequences of the termination, including any corporation tax liabilities that arise due to early termination. Both parties agree to address these tax liabilities in a fair and equitable manner.
Corporation tax clause with tax authority audits
This version includes tax authority audits.
The [Company] agrees to provide full cooperation during any audits conducted by the tax authorities concerning the corporation tax obligations under this Agreement. The [Company] will provide all necessary documentation and assist in resolving any issues raised by the tax authorities.
Corporation tax clause with tax deduction at source
This version includes tax deduction at source.
The [Investor] agrees to deduct any applicable corporation tax from payments made to the [Company] under this Agreement, as required by applicable law. The [Investor] will remit the deducted amounts to the relevant tax authority on behalf of the [Company].
Corporation tax clause with tax gross-up for tax deductions
This version includes tax gross-up for tax deductions.
If the [Investor] is required to withhold any taxes from payments made to the [Company], the [Investor] will gross-up the payment so that the [Company] receives the full amount due under the Agreement, as if no tax had been withheld.
Corporation tax clause with tax dispute resolution
This version includes tax dispute resolution.
In the event of a tax dispute arising from the [Company]’s corporation tax liabilities, both parties agree to resolve the dispute through negotiation or alternative dispute resolution methods, including mediation or arbitration, before seeking legal recourse.
Corporation tax clause with tax reporting requirements
This version includes tax reporting requirements.
The [Company] agrees to report its corporation tax obligations to the relevant tax authorities in a timely manner. The [Investor] reserves the right to request copies of the [Company]’s tax filings and supporting documentation to verify compliance.
Corporation tax clause with adjustment for tax rate changes
This version includes adjustments for tax rate changes.
If the applicable corporation tax rate changes during the term of this Agreement, the parties agree to adjust the amounts owed under the Agreement to reflect the new tax rate. Any increase in tax rates will be borne by the [Investor], while a decrease will result in a reduction in payment.
Corporation tax clause with tax liability on retained earnings
This version includes tax liability on retained earnings.
The [Company] will be responsible for paying corporation tax on any retained earnings that arise from the project under this Agreement. These retained earnings will be reported to the tax authorities as part of the [Company]’s tax filings.
Corporation tax clause with tax liability for prior-year profits
This version includes tax liability for prior-year profits.
If the [Company] incurs corporation tax liabilities for prior-year profits, these will be addressed in accordance with applicable tax laws. The [Investor] is not responsible for any tax liabilities related to profits earned before the start of this Agreement.
Corporation tax clause with reporting of tax liabilities
This version includes reporting of tax liabilities.
The [Company] agrees to report any corporation tax liabilities arising from this Agreement to the [Investor] within [X] days of the tax assessment. The [Investor] will reimburse the [Company] for any taxes paid in connection with this Agreement, as agreed upon in the payment terms.
Corporation tax clause with corporate structure review
This version includes corporate structure review.
The [Company] agrees to provide the [Investor] with a review of its corporate structure for tax efficiency, including any potential tax liabilities that could arise under the terms of this Agreement. The [Investor] may request adjustments to the corporate structure if deemed necessary to minimize tax liabilities.
Corporation tax clause with tax responsibility for joint ventures
This version includes tax responsibility for joint ventures.
In the event of a joint venture formed under this Agreement, the tax responsibilities for the joint venture’s profits and liabilities will be shared between the parties in proportion to their ownership interests in the venture.
Corporation tax clause with tax audits on profits
This version includes tax audits on profits.
The [Company] agrees to submit to a tax audit by the relevant tax authorities for the determination of any corporation tax due on profits arising from this Agreement. The audit will be conducted in accordance with local tax regulations, and any additional tax due will be paid promptly.
Corporation tax clause with tax deductibility of project costs
This version includes tax deductibility of project costs.
The [Company] agrees to account for all project costs, including labor, materials, and overhead, and will deduct these expenses from its taxable income when calculating its corporation tax liability. The [Investor] agrees that these costs will be verified against the project budget.
Corporation tax clause with tax liability upon sale of assets
This version includes tax liability upon asset sale.
If either party sells or transfers any assets related to the project under this Agreement, the party selling the assets will be liable for any corporation tax due on the proceeds from the sale. The other party will have no responsibility for these tax liabilities.
Corporation tax clause with tax impact from mergers or acquisitions
This version includes tax impact from mergers or acquisitions.
In the event of a merger, acquisition, or restructuring involving either party, both parties agree to assess the tax implications of such corporate actions and address any corporation tax liabilities that may arise as a result.
Corporation tax clause with tax-free status for charitable entities
This version applies to charitable entities.
If the [Investor] is a registered charitable organization with tax-free status, the [Company] will not charge VAT or corporation tax on services provided under this Agreement, provided that the [Investor] provides the necessary documentation to verify their tax-exempt status.
Corporation tax clause with tax payment on termination
This version includes tax payment on termination.
In the event of termination of this Agreement, both parties agree to determine and settle any outstanding tax liabilities, including corporation tax, before the termination is finalized. This includes any taxes related to the work completed up to the date of termination.
Corporation tax clause with payment of tax in installments
This version allows tax payments in installments.
If the [Company] incurs a corporation tax liability that exceeds [$X], the [Company] may apply for installment payments with the relevant tax authorities. The [Investor] agrees to make payments in installments according to the payment schedule provided by the [Company].
Corporation tax clause with foreign tax credit
This version includes a foreign tax credit.
If the [Investor] is entitled to a foreign tax credit for taxes paid on income derived from this Agreement, the [Investor] shall claim the credit on its tax returns. The [Company] agrees to provide necessary documentation to support the foreign tax credit claim.
Corporation tax clause with tax treatment of payments to employees
This version addresses employee payments.
The [Company] will pay all relevant corporation tax on any employee compensation provided under this Agreement. The [Investor] will not be liable for any corporate tax liabilities arising from employee salaries, wages, or benefits.
Corporation tax clause with corporate income tax on profits
This version includes corporate income tax on profits.
The [Company] agrees to pay corporation tax on all profits derived from the services provided under this Agreement, as required by the tax authorities. The [Investor] shall not be responsible for paying the [Company]’s corporate income tax.
Corporation tax clause with VAT recovery for tax-exempt entities
This version includes VAT recovery.
If the [Investor] is a tax-exempt entity, it may be eligible to recover VAT paid on goods and services provided under this Agreement. The [Company] will provide all necessary documentation to assist the [Investor] in claiming any VAT recovery.
Corporation tax clause with payment of tax penalties
This version includes tax penalty payment.
If either party incurs penalties due to non-compliance with corporation tax obligations under this Agreement, the party responsible for the non-compliance will bear the cost of any penalties, including interest charges.
Corporation tax clause with change in tax residency
This version includes changes in tax residency.
If the tax residency of the [Company] or [Investor] changes during the course of this Agreement, both parties will reassess their tax liabilities under the applicable tax laws and adjust the terms of the Agreement accordingly to reflect the change.
Corporation tax clause with tax treatment of dividends
This version covers tax treatment of dividends.
Any dividends paid by the [Company] to the [Investor] under this Agreement will be subject to the applicable corporation tax laws and withholding taxes. The [Company] agrees to withhold the appropriate amount of tax on any dividend payments to the [Investor].
Corporation tax clause with tax advice and consultation
This version includes tax advice.
Both parties agree to seek independent tax advice regarding their tax obligations under this Agreement. Each party will bear the cost of its own tax advice unless otherwise agreed upon in writing.
Corporation tax clause with tax compliance audit rights
This version includes audit rights.
The [Investor] reserves the right to request a tax compliance audit of the [Company] to ensure that all corporation tax liabilities have been properly reported and paid in accordance with the applicable laws.
Corporation tax clause with tax responsibility for third-party contractors
This version covers third-party contractors.
If the [Company] engages third-party contractors to perform services under this Agreement, the [Company] will be responsible for paying any corporation tax liabilities associated with the contractors’ payments, and the [Investor] will not be liable for these taxes.
Corporation tax clause with tax optimization strategy
This version includes a tax optimization strategy.
Both parties agree to work together to develop a tax optimization strategy for the services rendered under this Agreement. The strategy will aim to minimize tax liabilities and maximize tax efficiency, while remaining compliant with all applicable tax laws.
Corporation tax clause with taxes on intangible property
This version includes taxes on intangible property.
The [Company] will pay any applicable corporation tax on profits derived from the sale or licensing of intangible property under this Agreement, including intellectual property, patents, trademarks, and copyrights.
Corporation tax clause with tax treatment for digital goods and services
This version includes tax treatment for digital goods and services.
If the Agreement involves digital goods or services, the applicable VAT and corporation tax laws governing digital products will be adhered to. The [Company] will apply the appropriate tax rate to all digital goods and services provided under this Agreement.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.