124 STAT. 3666 PUBLIC LAW 111–347—JAN. 2, 2011 ‘‘CHAPTER 50—FOREIGN PROCUREMENT ‘‘Sec. 5000C. Imposition of tax on certain foreign procurement. ‘‘SEC. 5000C. IMPOSITION OF TAX ON CERTAIN FOREIGN PROCURE - MENT. ‘‘(a) IMPOSITION OF TAX.—There is hereby imposed on any for- eign 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 pur- poses of this section, the term ‘specified Federal procurement pay- ment’ 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 inter- national 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 procure- ment 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 per- son. ‘‘(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.’’. (2) CLERICAL AMENDMENT.—The table of chapters for sub- title D of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: ‘‘CHAPTER 50—FOREIGN PROCUREMENT’’. (3) EFFECTIVE DATE.—The amendments made by this sub- section shall apply to payments received pursuant to contracts entered into on and after the date of the enactment of this Act. (b) PROHIBITION ON REIMBURSEMENT OF FEES.— (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 activi- ties 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 (41 U.S.C. 403). (c) APPLICATION.—This section and the amendments made by this section shall be applied in a manner consistent with United States obligations under international agreements. 26 USC 5000C note. Definition. 26 USC 5000C note. Applicability. 26 USC 5000C note. Definition. 26 USC 5000C.
