52.229-11 Tax on Certain Foreign

Procurements—Notice and Representation.

As prescribed in 29.402-3(a), insert the following provision:

Tax on Certain Foreign Procurements—Notice and Representation (Jun 2020)

(a) Definitions. As used in this provision—

Foreign person means any person other than a United States person.

Specified Federal procurement payment means any payment made pursuant to a contract with a

foreign contracting party that is for goods, manufactured or produced, or services provided in a

foreign country that is not a party to an international procurement agreement with the United

States. For purposes of the prior sentence, a foreign country does not include an outlying area.

United States person as defined in 26 U.S.C. 7701(a)(30) means

(1) A citizen or resident of the United States;

(2) A domestic partnership;

(3) A domestic corporation;

(4) Any estate (other than a foreign estate, within the meaning of 26 U.S.C. 701(a)(31)); and

(5) Any trust if–

(i) A court within the United States is able to exercise primary supervision over the administration of

the trust; and

(ii) One or more United States persons have the authority to control all substantial decisions of the

trust.

(b) Unless exempted, there is a 2 percent tax of the amount of a specified Federal procurement

payment on any foreign person receiving such payment. See 26 U.S.C. 5000C and its implementing

regulations at 26 CFR 1.5000C-1 through 1.5000C-7.

(c) Exemptions from withholding under this provision are described at 26 CFR 1.5000C-1(d)(5)

through (7). The Offeror would claim an exemption from the withholding by using the Department of

the Treasury Internal Revenue Service Form W-14, Certificate of Foreign Contracting Party

Receiving Federal Procurement Payments, available via the internet at www.irs.gov/w14. Any

exemption claimed and self-certified on the IRS Form W-14 is subject to audit by the IRS. Any

disputes regarding the imposition and collection of the 26 U.S.C. 5000C tax are adjudicated by the

IRS as the 26 U.S.C. 5000C tax is a tax matter, not a contract issue. The IRS Form W-14 is provided

to the acquiring agency rather than to the IRS.

(d) For purposes of withholding under 26 U.S.C. 5000C, the Offeror represents that

(1) It □ is □ is not a foreign person; and
(2) If the Offeror indicates "is" in paragraph (d)(1) of this provision, then the Offeror represents

that—I am claiming on the IRS Form W-14 □ a full exemption, or □ partial or no exemption [Offeror

shall select one] from the excise tax.

(e) If the Offeror represents it is a foreign person in paragraph (d)(1) of this provision, then—

(1) The clause at FAR 52.229-12, Tax on Certain Foreign Procurements, will be included in any

resulting contract; and

(2) The Offeror shall submit with its offer the IRS Form W-14. If the IRS Form W-14 is not submitted

with the offer, exemptions will not be applied to any resulting contract and the Government will

withhold a full 2 percent of each payment.

(f) If the Offeror selects "is" in paragraph (d)(1) and "partial or no exemption" in paragraph (d)(2) of

this provision, the Offeror will be subject to withholding in accordance with the clause at FAR

52.229-12, Tax on Certain Foreign Procurements, in any resulting contract.

(g) A taxpayer may, for a fee, seek advice from the Internal Revenue Service (IRS) as to the proper

tax treatment of a transaction. This is called a private letter ruling. Also, the IRS may publish a

revenue ruling, which is an official interpretation by the IRS of the Internal Revenue Code, related

statutes, tax treaties, and regulations. A revenue ruling is the conclusion of the IRS on how the law

is applied to a specific set of facts. For questions relating to the interpretation of the IRS regulations

go to https://www.irs.gov/help/tax-law-questions.

(End of provision)

Parent topic: 52.229 [Reserved]