FIDIC 1999 Escalation Formula clause 13.8
"Pn" is an multiplier to the work done amount for adjustment of rise or fall in prices of the specified items from the base line mentioned in the contract already. The adjusted amount thus worked out excluding tax charge that is to be deducted in the form of fixed with-holding tax at source. To ensure full compensation add it first before tax charge deduction and in this manner full compensation could be ensured for the specified items. In other words the taxation on escalation amount should be borne by the Employer.
