- When is tax ‘payable’ under a SPA indemnity? (Minera Las Bambas SA v Glencore)
- What are the practical implications of this case?
- What was the background?
- What did the Court decide?
- When is tax ‘payable’?
- Deed of Indemnity
- VAT credits and unrefunded VAT
- Reduction of indemnity amount because of failure to prepay disputed tax
- Case details
Tax analysis: In Minera Las Bambas v Glencore Queensland  EWCA Civ 972, the Court of Appeal largely upheld the decision of the High Court that VAT assessed by the Peruvian tax authorities was not ‘payable’ within the meaning of the tax indemnity in a share purchase agreement unless and until the process of appealing to the Peruvian courts had been finally concluded so that any tax debt became ‘coercively’ enforceable in accordance with Peruvian tax law. This was not the case simply because an assessment for that tax had been raised by the Peruvian tax authorities because the assessment alone did not trigger the necessary enforcement powers. The Court of Appeal made a number of other important observations about the interpretation of commercially-negotiated tax indemnity wording.
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