Code of Federal Regulations Title 48. Federal Acquisition Regulations System 48.52.229-9 Taxes—Cost–Reimbursement Contracts With Foreign Governments

As prescribed in 29.402–2(b), insert the following clause:

Taxes—Cost–Reimbursement Contracts With Foreign Governments (MAR 1990)

(a) Any tax or duty from which the United States Government is exempt by agreement with the Government of ______ [insert name of the foreign government], or from which any subcontractor under this contract is exempt under the laws of ______ [insert name of country], shall not constitute an allowable cost under this contract.

(b) If any subcontractor obtains a foreign tax credit that reduces its Federal income tax liability under the United States Internal Revenue Code (Title 26, U.S.C.) because of the payment of any tax or duty that was reimbursed under this contract, the amount of the reduction shall be paid (not credited to the contract) to the Treasurer of the United States at the time the Federal income tax return is filed.

(End of clause)