26 U.S.C. § 5000C

Current through P.L. 118-106 (published on www.congress.gov on 10/04/2024)

Section 5000C - Imposition of tax on certain foreign procurement

(a) Imposition of tax

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) Specified Federal procurement payment

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) Foreign person

For purposes of this section, the term "foreign person" means any person other than a United States person.

(d) Administrative provisions

(1) Withholding

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

(2) Other administrative provisions

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

26 U.S.C. § 5000C

Added Pub. L. 111-347, title III, §301(a)(1), Jan. 2, 2011, 124 Stat. 3666.

STATUTORY NOTES AND RELATED SUBSIDIARIES

EFFECTIVE DATE Pub. L. 111-347, §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, §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, §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 amendments made by this section shall be applied in a manner consistent with United States obligations under international agreements."

Internal Revenue Code of 1986: The term "Internal Revenue Code of 1986" means this title, and the term "Internal Revenue Code of 1939" means the Internal Revenue Code enacted February 10, 1939, as amended.
United States person: The term "United States person" means-(A) a citizen or resident of the United States,(B) a domestic partnership,(C) a domestic corporation,(D) any estate (other than a foreign estate, within the meaning of paragraph (31)), and(E) any trust if-(i) a court within the United States is able to exercise primary supervision over the administration of the trust, and(ii) one or more United States persons have the authority to control all substantial decisions of the trust.
person: The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.