252.229-7014 — Full Exemption from Two-Percent Excise Tax on Certain Foreign Procurements.
Researched by the BidStride Research Team
What This Clause Requires
DFARS 252.229-7014 — Full Exemption from Two-Percent Excise Tax on Certain Foreign Procurements.. This clause is part of the Defense Federal Acquisition Regulation Supplement and applies specifically to Department of Defense contracts.
Official Regulation Text
252.229-7014 Full Exemption from Two-Percent Excise Tax on Certain Foreign Procurements. As prescribed in 229.402-70(k), use the following clause: Full Exemption From Two-Percent Excise Tax on Certain Foreign Procurements (OCT 2022) (a) As the Contractor represented in its offer, any item, including any item delivered under subcontract; any service; or any combination thereof delivered under this contract is fully exempt from the 2-percent excise tax withholding imposed by 26 U.S.C. 5000C and implemented by Federal Acquisition Regulation (FAR) 52.229-12, Tax on Certain Foreign Procurements. (b) If the full exemption no longer applies due to a change in circumstances during the performance of the contract, causing the Contractor to become subject to the withholding for the 2-percent excise tax as imposed by 26 U.S.C. 5000C, then the Contractor shall immediately comply with the notification and billing requirements of FAR clause 52.229-12. (End of clause) [87 FR 65517, Oct. 28, 2022]
Compliance Checklist
- 5000C, then the Contractor shall immediately comply with the notification and billing requirements of FAR clause 52.229-12.
Flow-Down to Subcontractors
Flow-down required
This clause must be included in subcontracts with no subcontractors where the subcontractor will perform work covered by this clause. Typically appears in contract Section Section I.
Frequently Asked Questions
DFARS 252.229-7014 (Full Exemption from Two-Percent Excise Tax on Certain Foreign Procurements.) is a Defense Federal Acquisition Regulation Supplement clause applicable to Department of Defense contracts.
DFARS 252.229-7014 is typically required in DoD contracts when the contracting officer determines it's applicable. Check Section I of your solicitation.
Flow-down requirements vary. Review the specific clause text for subcontractor applicability provisions.
This summary is for informational purposes only and reflects the BidStride Research Team's plain-English interpretation of the regulation. It is not legal advice and does not constitute an attorney-client relationship. Always consult the official Federal Acquisition Regulation (FAR) or Defense Federal Acquisition Regulation Supplement (DFARS) text and qualified legal counsel for compliance decisions.