§5000C — Title 26 Internal Revenue Code | U.S. Code

Summary

Foreign persons who receive a U.S. government contract payment for goods made or services done in a country that is not part of an international procurement agreement with the U.S. must pay a 2 percent tax. Foreign person means anyone not a U.S. person. Amounts withheld under chapter 3 must be increased by this tax, and for subtitle F it is treated as a tax under subtitle A.

Title 26, §5000C

Internal Revenue Code — Source: USLM XML via OLRC

(a)There is hereby imposed on any foreign person that receives a specified Federal procurement payment a tax equal to 2 percent of the amount of such specified Federal procurement payment.

(b)For purposes of this section, the term “specified Federal procurement payment” means any payment made pursuant to a contract with the Government of the United States for—

(1)the provision of goods, if such goods are manufactured or produced in any country which is not a party to an international procurement agreement with the United States, or

(2)the provision of services, if such services are provided in any country which is not a party to an international procurement agreement with the United States.

(c)For purposes of this section, the term “foreign person” means any person other than a United States person.

(d)(1)The amount deducted and withheld under chapter 3 shall be increased by the amount of tax imposed by this section on such payment.

(2)For purposes of subtitle F, any tax imposed by this section shall be treated as a tax imposed by subtitle A.

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 111–347, title III, § 301(a)(3), Jan. 2, 2011, 124 Stat. 3666, provided that: “The

Amendments

made by this subsection [enacting this section] shall apply to payments received pursuant to contracts entered into on and after the date of the enactment of this Act [Jan. 2, 2011].” Prohibition on Reimbursement of Fees Pub. L. 111–347, title III, § 301(b), Jan. 2, 2011, 124 Stat. 3666, provided that: “(1) In general.—The head of each executive agency shall take any and all measures necessary to ensure that no funds are disbursed to any foreign contractor in order to reimburse the tax imposed under section 5000C of the Internal Revenue Code of 1986. “(2) Annual review.—The Administrator for Federal Procurement Policy shall annually review the contracting activities of each executive agency to monitor compliance with the requirements of paragraph (1). “(3) Executive agency.—For purposes of this subsection, the term ‘executive agency’ has the meaning given the term in section 4 of the Office of Federal Procurement Policy Act ([former] 41 U.S.C. 403) [see 41 U.S.C. 133].” Application Pub. L. 111–347, title III, § 301(c), Jan. 2, 2011, 124 Stat. 3666, provided that: “This section [enacting this section and provisions set out as notes under this section] and the

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made by this section shall be applied in a manner consistent with United States obligations under international agreements.”

§5000C Imposition of tax on certain foreign procurement

Summary

Title 26, §5000C

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Amendments

Amendments

Citations & Metadata