A Look At IRS Plan For Contracts With Foreign Contractors
Law360, New York (May 1, 2015, 3:38 PM EDT) -- Recently, the Internal Revenue Service released proposed regulations related to the assessment of a 2 percent excise tax on contracts with foreign contractors. More specifically, Section 301 of the James Zadroga 9/11 Health and Compensation Act of 2010, Public Law 111-347 (124 Stat. 3623) as codified in Internal Revenue Code Section 5000C, imposes on any foreign person a 2 percent tax on certain payments received from the United States government pursuant to a contract with the U.S. government entered into on and after Jan. 2, 2011, for the provision of goods or services. The tax will be assessed if the goods are manufactured or produced or the services are provided in any country that is not a party to an international procurement agreement with the U.S. Additionally, no funds may be disbursed to any foreign contractor to reimburse the tax imposed under Section 5000C....
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