29.402-3 Tax on certain foreign procurements
Source: FAR 29.402-3 on acquisition.gov
FAR 29.402-3 requires specific tax-related provisions and clauses in most foreign procurement solicitations and contracts, with clear exceptions, to ensure compliance with U.S. tax laws.
Overview
FAR 29.402-3 establishes requirements for addressing the U.S. tax on certain foreign procurements. It mandates the inclusion of specific provisions and clauses in solicitations and contracts to ensure compliance with tax obligations under U.S. law. The regulation applies to most solicitations, including those for commercial products and services, but outlines several exceptions, such as acquisitions below the simplified acquisition threshold, emergency acquisitions, and certain humanitarian assistance contracts. Contracting officers must insert provision 52.229-11 in applicable solicitations and clause 52.229-12 in contracts where the contractor is identified as a foreign person. This ensures that foreign contractors are aware of and comply with U.S. tax requirements related to foreign procurements.
Key Rules
- Provision 52.229-11 Requirement
- Must be included in most solicitations, except for specified exceptions (e.g., low-value, emergency, or certain humanitarian contracts).
- Clause 52.229-12 Requirement
- Must be included in solicitations containing 52.229-11 and in contracts where the contractor is a foreign person per their representation.
Responsibilities
- Contracting Officers: Ensure correct insertion of the provision and clause in solicitations and contracts, and verify applicability of exceptions.
- Contractors: Accurately represent their status as a foreign person and comply with any tax obligations if applicable.
- Agencies: Oversee compliance and ensure exceptions are properly documented.
Practical Implications
- This section ensures the U.S. government addresses tax liabilities on foreign procurements, reducing risk of non-compliance.
- Contractors must be diligent in their representations, as misrepresentation can lead to penalties.
- Contracting officers must be aware of exceptions to avoid unnecessary administrative burden or omission of required clauses.
(a) Insert the provision at 52.229-11, Tax on Certain Foreign Procurements—Notice and Representation, in solicitations, including solicitations using part 12 procedures for the acquisition of commercial products and commercial services, unless one of the following exceptions applies:
(1) Acquisitions using simplified acquisition procedures that do not exceed the simplified acquisition threshold (as defined in 2.101).
(2) Emergency acquisitions using the emergency acquisition flexibilities defined in part 18.
(3) Acquisitions using the unusual and compelling urgency authority per 6.303-2.
(4) Contracts with a single individual for personal services that will not exceed the simplified acquisition threshold on an annual calendar year basis for all years of the contract.
(5) Acquisitions if the requiring activity identifies that the requirement is for certain foreign humanitarian assistance contracts which are payments made by the U.S. Government agencies pursuant to a contract with a foreign contracting party to obtain goods or services described in or authorized under http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title7-section1691&num=0&edition=prelim" target="_blank">7 U.S.C. 1691, et seq., http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title22-section2151&num=0&edition=prelim" target="_blank">22 U.S.C. 2151, et seq., 22 U.S.C 2601 et seq., http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title22-section5801&num=0&edition=prelim" target="_blank">22 U.S.C. 5801 et seq., http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title22-section5401&num=0&edition=prelim" target="_blank">22 U.S.C. 5401 et seq., http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section402&num=0&edition=prelim" target="_blank">10 U.S.C. 402, http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section404&num=0&edition=prelim" target="_blank">10 U.S.C. 404, http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section407&num=0&edition=prelim" target="_blank">10 U.S.C. 407, http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section2557&num=0&edition=prelim" target="_blank">10 U.S.C. 2557, and http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section2561&num=0&edition=prelim" target="_blank">10 U.S.C. 2561.
(b) Insert the clause at 52.229-12, Tax on Certain Foreign Procurements, in—
(1) Solicitations that contain the provision at 52.229-11, Tax on Certain Foreign Procurements—Notice and Representation; and
(2) Resultant contracts in which the contractor has indicated that it was a foreign person in solicitation provision 52.229-11, Tax on Certain Foreign Procurements—Notice and Representation.