Anne Powell (Bryan Cave Leighton Paisner) considers how our historic experience of tax covenants steer us to resolve new Pillar Two risks.
How do you draft a tax covenant for a corporate sale when the Seller Group is within the scope of a Pillar Two charge? This is an issue that will become increasingly relevant as many aspects of Pillar Two became effective from 31 December 2023.
Before diving in there are a couple of observations to make.
Tax covenants can have notoriously complex drafting and are at risk of being interpreted literally by a court. In one case from 2012 in their attempt to interpret it the judge described the tax covenant as a computer programme.
However conceptually the tax covenant is a straightforward price adjustment mechanism. Has the Buyer paid too much for the company? Put another way is any...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
Anne Powell (Bryan Cave Leighton Paisner) considers how our historic experience of tax covenants steer us to resolve new Pillar Two risks.
How do you draft a tax covenant for a corporate sale when the Seller Group is within the scope of a Pillar Two charge? This is an issue that will become increasingly relevant as many aspects of Pillar Two became effective from 31 December 2023.
Before diving in there are a couple of observations to make.
Tax covenants can have notoriously complex drafting and are at risk of being interpreted literally by a court. In one case from 2012 in their attempt to interpret it the judge described the tax covenant as a computer programme.
However conceptually the tax covenant is a straightforward price adjustment mechanism. Has the Buyer paid too much for the company? Put another way is any...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
