HR 4818 PP 
available by this Act under the heading ‘‘Millennium Chal-
lenge Corporation’’, not to exceed $130,000 shall be avail-
able for representation and entertainment allowances. 
PROHIBITION ON TAXATION OF UNITED STATES 
ASSISTANCE 
SEC. 506. (a) PROHIBITION ON TAXATION.—None of 
the funds appropriated by this Act may be made available 
to provide assistance for a foreign country under a new 
bilateral agreement governing the terms and conditions 
under which such assistance is to be provided unless such 
agreement includes a provision stating that assistance pro-
vided by the United States shall be exempt from taxation, 
or reimbursed, by the foreign government, and the Sec-
retary of State shall expeditiously seek to negotiate 
amendments to existing bilateral agreements, as nec-
essary, to conform with this requirement. 
(b)
REIMBURSEMENT
OF
FOREIGN
TAXES.—An 
amount equivalent to 200 percent of the total taxes as-
sessed during fiscal year 2005 on funds appropriated by 
this Act by a foreign government or entity against com-
modities financed under United States assistance pro-
grams for which funds are appropriated by this Act, either 
directly or through grantees, contractors and subcontrac-
tors shall be withheld from obligation from funds appro-
priated for assistance for fiscal year 2006 and allocated 
for the central government of such country and for the
HR 4818 PP 
West Bank and Gaza Program to the extent that the Sec-
retary of State certifies and reports in writing to the Com-
mittees on Appropriations that such taxes have not been 
reimbursed to the Government of the United States. 
(c) DE MINIMIS EXCEPTION.—Foreign taxes of a de 
minimis nature shall not be subject to the provisions of 
subsection (b). 
(d) REPROGRAMMING OF FUNDS.—Funds withheld 
from obligation for each country or entity pursuant to sub-
section (b) shall be reprogrammed for assistance to coun-
tries which do not assess taxes on United States assistance 
or which have an effective arrangement that is providing 
substantial reimbursement of such taxes. 
(e) DETERMINATIONS.—
(1) The provisions of this section shall not 
apply to any country or entity the Secretary of State 
determines—
(A) does not assess taxes on United States 
assistance or which has an effective arrange-
ment that is providing substantial reimburse-
ment of such taxes; or 
(B) the foreign policy interests of the 
United States outweigh the policy of this sec-
tion to ensure that United States assistance is 
not subject to taxation.
HR 4818 PP 
(2) The Secretary of State shall consult with 
the Committees on Appropriations at least 15 days 
prior to exercising the authority of this subsection 
with regard to any country or entity. 
(f) IMPLEMENTATION.—The Secretary of State shall 
issue rules, regulations, or policy guidance, as appropriate, 
to implement the prohibition against the taxation of assist-
ance contained in this section. 
(g) DEFINITIONS.—As used in this section—
(1) the terms ‘‘taxes’’ and ‘‘taxation’’ refer to 
value added taxes and customs duties imposed on 
commodities financed with United States assistance 
for programs for which funds are appropriated by 
this Act; and 
(2) the term ‘‘bilateral agreement’’ refers to a 
framework bilateral agreement between the Govern-
ment of the United States and the government of 
the country receiving assistance that describes the 
privileges
and
immunities
applicable
to
United 
States foreign assistance for such country generally, 
or an individual agreement between the Government 
of the United States and such government that de-
scribes, among other things, the treatment for tax 
purposes that will be accorded the United States as-
sistance provided under that agreement.