Who is responsible for all taxes resulting from the provision of the PMS Solution under the Even Hotels agreement?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.5 Taxes.
All Taxes resulting from the provision of the PMS Solution under this Agreement shall be the responsibility of Hotel.
If IHG or an IHG Affiliate is required to pay any such Taxes or penalties or interest relating thereto, IHG or an IHG Affiliate will provide an invoice for such amounts and Hotel will pay such amounts within thirty (30) days of the date of the invoice.
- 3.6 Withholding Taxes.
If Hotel is required to pay any applicable withholding tax payable to the relevant local tax authorities, Hotel shall (a) pay the applicable PMS Solution fee less the amount of the withholding tax; (b) make such required withholding tax payment to the local tax authorities; (c) within thirty (30) days after the date of payment of any
such withholding tax payment, provide IHG with the original or a certified copy of a receipt evidencing payment thereof to the relevant local tax authority; and (d) take all action reasonably required to enable IHG to obtain any tax credit which may be available to it.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels's 2025 Franchise Disclosure Document, the hotel is responsible for all taxes resulting from the provision of the PMS (Property Management System) Solution under the agreement. This means that any income, gross receipts, franchise, sales, use, transfer, value-added, excise, customs, duties, property, or withholding taxes, including any associated interest, penalties, or other additions, are the responsibility of the Even Hotels franchisee.
If IHG (InterContinental Hotels Group) or an IHG affiliate is required to pay any of these taxes, penalties, or interest, they will invoice the hotel for the amounts paid. The Even Hotels franchisee is then obligated to pay the invoiced amount within thirty days of the invoice date. This ensures that while IHG may handle the initial payment of taxes for administrative reasons, the financial burden ultimately falls on the franchisee.
Furthermore, if the Even Hotels franchisee is required to pay any withholding tax to local tax authorities, they must pay the PMS Solution fee less the withholding tax amount. The franchisee must then provide IHG with a receipt or certified copy as proof of payment to the local tax authority within thirty days. Additionally, the franchisee must take all actions required to enable IHG to obtain any available tax credit. This process ensures compliance with local tax laws and allows IHG to potentially benefit from tax credits, while the franchisee remains responsible for the tax obligations.