Tax Clauses in Sindicated Loan Agreement

Abstract

Syndicated loan agreement allows for lenders often from different jurisdictions to finance the borrower and its project for which the loan is granted. The syndicated loan agreement comprises of tax clauses designed to regulate situations in which any funds transfer under the loan agreement may be taxed and generate additional costs. With the special role of syndicate agent, the loan agreement sets out rules for tax deduction and payment mechanisms. The purpose of this article is to introduce the reader to tax clauses of syndicated loan agreement with a focus of a role of a syndicate agent. Analysis of each tax clause will focus on determining the purpose of each tax clause and the purpose of tax clauses in syndicate of a loan agreement in general.