Legal Due Diligence · glossary
The seller's promise to pay the buyer an amount equal to the target's tax for the period before the locked box date. Sunrise's Polish VAT enquiry, an exposure of €120,000 to €310,000, falls under it, so no separate indemnity was needed. Report §10.1 · Chapter 11
Explained in Chapter 11, Litigation, Tax and the Rest, of Legal Due Diligence.
The main page for this term is Tax covenant, in M&A Foundations.
What should Atlas do about up to €310,000 of old Polish VAT? Nothing special, because share deals have a standard tool for this. The tax covenant is the seller's promise to pay the buyer an amount equal to the target's tax for the period when the business earned money for the seller.Read Chapter 11, Litigation, Tax and the Rest →
Chapter 1 and this glossary are open to everyone; the whole edition is free to read with a free account until 31 January, and it stays open to an account opened by then.Chapter 1 of Legal Due Diligence and this glossary are free to read; the rest of the edition is in the Library, at €12 a month or €79 for a Year Pass.
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