Tax clawback agreement,

Definition of Tax clawback agreement:

1. A tax clawback agreement is an arrangement whereby the tax benefits received from a given venture are reinvested into that venture to cover any cash shortages. A tax clawback is just one of many types of similar arrangements that cover various distributions such as profits, dividends or even stock distributions.

2. Tax clawbacks are among the most popular type of clawback arrangements, providing instant and easy access to additional financing. Clawbacks are also used to describe what, in effect, amounts to a return of previously distributed money.

3. Tax benefits received from a business venture are reinvested back into the business.