what is a tax indemnity clause
by smlbizlaw. Tax indemnity in a small business context means Company A compensates Company B for taxes assessed on Company B as a result of Company Aâs business activities.This concept often comes into play when two parties enter into a co-marketing agreement and one party is promoting the products of another party.hile you are likely liable for taxes on those commissions, you do not want to be liable for other taxes associated with XYZâs sales of its products. Including a clause like the one below would protect your business in that scenario: âTax Indemnity.