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FAR and DFARS › DFARS Part 252: Solicitation Provisions and Contract Clauses › Subpart 252.2

DFARS 252.229-7014 Full Exemption from Two-Percent Excise Tax on Certain Foreign Procurements.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This clause confirms that items or services delivered under the contract are fully exempt from the 2-percent excise tax withholding under 26 U.S.C. 5000C and FAR 52.229-12, based on the Contractor's representation in its offer. If circumstances change during performance and the exemption no longer applies, the Contractor must immediately follow the notification and billing requirements of FAR 52.229-12.

Applies to: Contractors delivering items or services under this contract that were represented as fully exempt from the 2-percent excise tax

What it requires

  • Immediately comply with the notification and billing requirements of FAR clause 52.229-12 if the full exemption no longer applies due to a change in circumstances during contract performance

Key terms: 2-percent excise tax · 26 U.S.C. 5000C · FAR 52.229-12 · full exemption · withholding

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

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)

Sections it refers to

Sections that refer to it

  • 212.301 Solicitation provisions and contract clauses for the acquisition of commercial products and commercial services.
  • 213.301 Governmentwide commercial purchase card.
  • 229.204 Federal excise tax on specific foreign contract payments.
  • 229.402-70 Additional provisions and clauses.
  • 232.1108-70 Prohibition of Governmentwide commercial purchase card as a method of payment when the tax on certain foreign procurements applies.

← 252.229-7013 Tax exemptions (Spain)—representation. · 252.231-7000 Supplemental cost principles. →

Rule changes for DFARS Part 252

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

DFARS 252.229-7014 Full Exemption from Two-Percent Excise Tax on Certain Foreign Procurements · SpendQuery