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International Taxation 94B
difference between implicit and explicit Guarantee
Replies (2)
Quick Summary
Explicit Guarantee - It could be understood as an express agreement between two parties or a contract of guarantee.
Implicit Guarantee - It would have a wide coverage and narrow interpretation should be avoided. For eg of there is a wholly owned subsidiary or a partial subsidiary of company, then there would be implicit guarantee on holding company.
However, one may note that these are terms are not defined in section 94B and can lead to unnecessary litigation going forward.
Thanks and Regards,
Nihit Somani
Implicit Guarantee - It would have a wide coverage and narrow interpretation should be avoided. For eg of there is a wholly owned subsidiary or a partial subsidiary of company, then there would be implicit guarantee on holding company.
However, one may note that these are terms are not defined in section 94B and can lead to unnecessary litigation going forward.
Thanks and Regards,
Nihit Somani
Thanx
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