A tax indemnity is a contractual promise by the seller to compensate the buyer for tax liabilities of the target relating to periods up to completion, regardless of whether such liabilities had crystallised by completion. Tax indemnities are typically given on a dollar-for-dollar basis (no basket or deductible), with longer survival periods than general business warranties (commonly 4 to 7 years from completion to align with the ATO period of review for the relevant entity), and outside any general liability cap.
The interaction between the tax indemnity and the tax warranties in the share sale agreement is important: the buyer typically claims under whichever provision provides the better recovery in the circumstances.