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Gross up for tax deducted

Loan agreements will commonly include a ‘gross upâ€� clause - a provision which requires the payer to gross up payments for any tax deducted, so that the recipient receives the expected amount i.e. the interest in full. In other words, the payer must bear the cost of the income tax deducted. »Ê¹ÚÌåÓýapp loan agreement will usually require the recipient to take whatever action they can to reduce the tax charged, for example, by submitting a claim for relief under a double taxation agreement.