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[Federal Register Volume 79, Number 189 (Tuesday, September 30, 2014)]
[Rules and Regulations]
[Pages 58699-58700]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-22860]

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 229 and 252

RIN 0750-AI19

Defense Federal Acquisition Regulation Supplement: Clauses With 
Alternates--Taxes (DFARS Case 2013-D025)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Final rule.

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SUMMARY: DoD is issuing a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to create an overarching 
prescription for a tax-related clause with an alternate and add a 
separate prescription for the basic clause. The rule also includes in 
the regulation the full text of the alternate clause.

DATES: Effective September 30, 2014.

FOR FURTHER INFORMATION CONTACT: Ms. Jennifer Hawes, telephone 571-372-
6115.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD published a proposed rule in the Federal Register at 79 FR 
11381 on February 28, 2014, to revise the presentation of the DFARS 
part 229 clause with an alternate. No public comments were submitted in 
response to the proposed rule.

II. Discussion

    This final rule revises the single DFARS part 229 clause, 252.229-
7001, Tax Relief, which has an alternate. The naming convention results 
in proposed new clause titles, i.e., Tax Relief--Basic and Tax Relief--
Alternate I. An umbrella prescription contains the elements common to 
the basic clause and the alternate. The specific prescriptions for the 
basic clause and the alternate address only the requirements for their 
use that enable the selection of the basic or the alternate.

III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

IV. Regulatory Flexibility Act

    A final regulatory flexibility analysis has been prepared 
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., 
and is summarized as follows:
    This final rule amends the Defense Federal Acquisition Regulation 
Supplement (DFARS) to (1) create an umbrella prescription for the 
elements common to the basic clause and the alternate of DFARS clause 
252.229-7001, Tax Relief, (2) create a specific prescription for the 
basic clause and alternate clause that address only the requirements 
for their use, and (3) include the full text of the alternate clause.
    No comments were received from the public in response to the 
initial regulatory flexibility analysis.
    There will be no impact on small business entities since DFARS 
clause 252.229-7001 is used only in solicitations and contracts when 
award is made to a foreign concern and performance is in a foreign 
country.
    This rule does not add any new information collection, reporting, 
or record keeping requirements. No alternatives were identified that 
will accomplish the objectives of the rule.

V. Paperwork Reduction Act

    The rule does not contain any information collection requirements 
that require the approval of the Office of Management and Budget under 
the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects in 48 CFR Parts 229 and 252

    Government procurement.

Manuel Quinones,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 229 and 252 are amended as follows:

0
1. The authority citation for 48 CFR parts 229 and 252 continues to 
read as follows:

    Authority: 41 U.S.C. 1303 and 48 CFR chapter 1.

[[Page 58700]]

PART 229--TAXES

0
2. Amend section 229.402-70 by revising paragraph (a) to read as 
follows:

229.402-70  Additional clauses.

    (a) Use the basic or the alternate of the clause at 252.229-7001, 
Tax Relief, in solicitations and contracts when a contract will be 
awarded to a foreign concern for performance in a foreign country.
    (1) Use the basic clause in solicitations and contracts when the 
contract will be performed in a foreign country other than Germany.
    (2) Use the alternate I clause in solicitations and contracts when 
the contract will be performed in Germany.
* * * * *

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
3. Amend section 252.229-7001 by--
0
a. Revising the introductory text, clause title and date; and
0
b. Revising Alternate I.
    The revisions read as follows:

252.229-7001  Tax Relief.

    As prescribed in 229.402-70(a), use one of the following clauses:
    Basic. As prescribed at 229.402-70(a)(1), use the following clause.

TAX RELIEF--BASIC (SEP 2014)

* * * * *
    Alternate I. As prescribed at 229.402-70(a)(2), use the 
following clause, which adds a paragraph (d) not included in the 
basic clause.

TAX RELIEF--ALTERNATE I (SEP 2014)

    (a) Prices set forth in this contract are exclusive of all taxes 
and duties from which the United States Government is exempt by 
virtue of tax agreements between the United States Government and 
the Contractor's government. The following taxes or duties have been 
excluded from the contract price:

NAME OF TAX: [Offeror insert]
RATE (PERCENTAGE): [Offeror insert]

    (b) The Contractor's invoice shall list separately the gross 
price, amount of tax deducted, and net price charged.
    (c) When items manufactured to United States Government 
specifications are being acquired, the Contractor shall identify the 
materials or components intended to be imported in order to ensure 
that relief from import duties is obtained. If the Contractor 
intends to use imported products from inventories on hand, the price 
of which includes a factor for import duties, the Contractor shall 
ensure the United States Government's exemption from these taxes. 
The Contractor may obtain a refund of the import duties from its 
government or request the duty-free import of an amount of supplies 
or components corresponding to that used from inventory for this 
contract.
    (d) Tax relief will be claimed in Germany pursuant to the 
provisions of the Agreement Between the United States of America and 
Germany Concerning Tax Relief to be Accorded by Germany to United 
States Expenditures in the Interest of Common Defense. The 
Contractor shall use Abwicklungsschein fuer abgabenbeguenstigte 
Lieferungen/Leistungen nach dem Offshore Steuerabkommen (Performance 
Certificate for Tax-Free Deliveries/Performance according to the 
Offshore Tax Relief Agreement) or other documentary evidence 
acceptable to the German tax authorities. All purchases made and 
paid for on a tax-free basis during a 30-day period may be 
accumulated, totaled, and reported as tax-free.

(End of clause)

[FR Doc. 2014-22860 Filed 9-29-14; 8:45 am]
BILLING CODE 5001-06-P
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