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The Tax Indemnification Agreement serves as a crucial risk management tool in Indonesian business transactions, particularly in mergers, acquisitions, and corporate restructurings. This document becomes essential when parties need to allocate tax-related risks and responsibilities, especially for historical tax liabilities or potential future tax assessments. The agreement is structured to comply with Indonesian tax laws, including Law No. 6 of 1983 on General Tax Provisions and Procedures (KUP Law) and subsequent amendments, while also adhering to Indonesian civil law requirements for contractual obligations. It typically includes detailed provisions for notification procedures, claim handling, payment mechanisms, and dispute resolution methods specific to the Indonesian legal context. The document is particularly relevant in situations where tax exposures are significant or complex, or where cross-border elements necessitate careful consideration of international tax implications while maintaining compliance with Indonesian regulatory requirements.

1. Parties: Identification of the indemnitor and indemnitee, including their complete legal names, addresses, and registration numbers

2. Background: Context of the agreement, including the underlying transaction or relationship giving rise to the tax indemnification obligation

3. Definitions: Detailed definitions of key terms used throughout the agreement, including 'Tax', 'Tax Authority', 'Tax Liability', 'Indemnified Taxes', and 'Tax Claims'

4. Scope of Indemnification: Detailed description of the tax liabilities covered by the indemnification, including specific types of taxes and relevant time periods

5. Indemnification Obligations: Specific obligations of the indemnitor, including timing and method of payment, and conditions precedent to payment

6. Notification and Claims Procedure: Process for notifying the indemnitor of tax claims and procedures for handling such claims

7. Payment Mechanics: Detailed procedures for making indemnification payments, including currency, timing, and method of payment

8. Tax Treatment of Payments: Specification of how indemnification payments themselves should be treated for tax purposes

9. Dispute Resolution: Procedures for resolving disputes related to the indemnification obligations

10. Term and Termination: Duration of the agreement and circumstances under which it may be terminated

11. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and designation of competent courts