29.402-4
Taxes—Foreign Contracts in Afghanistan
Always include the correct tax clause (52.229-13 or 52.229-14) in Afghanistan contracts based on whether the contract supports U.S. Forces or NATO under SOFA.
Overview
FAR 29.402-4 addresses the proper use of tax-related clauses in U.S. government contracts performed in Afghanistan. It specifies which clause to include in solicitations and contracts based on whether the contract is awarded by or on behalf of U.S. Forces, or in support of NATO operations governed by the NATO Status of Forces Agreement (SOFA). The regulation ensures that contractors and contracting officers apply the correct tax treatment and comply with international agreements when operating in Afghanistan.
Key Rules
- Clause 52.229-13 (Taxes—Foreign Contracts in Afghanistan)
- Must be included in all solicitations and contracts with performance in Afghanistan awarded by or on behalf of U.S. Forces, unless Clause 52.229-14 applies.
- Clause 52.229-14 (Taxes—Foreign Contracts in Afghanistan (NATO SOFA))
- Used instead of Clause 52.229-13 for contracts awarded on behalf of or in support of NATO, where the NATO SOFA governs.
Responsibilities
- Contracting Officers: Ensure the correct tax clause (52.229-13 or 52.229-14) is included based on the contract's purpose and governing agreements.
- Contractors: Review and comply with the applicable tax clause requirements in their contracts.
- Agencies: Oversee compliance with international agreements and proper clause usage in contracts performed in Afghanistan.
Practical Implications
- This section exists to ensure compliance with U.S. and international tax obligations in Afghanistan, reducing the risk of improper tax treatment.
- It impacts daily contracting by requiring careful review of contract purpose and applicable agreements before clause selection.
- Common pitfalls include using the wrong clause, leading to compliance issues or disputes over tax liabilities.