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FAR and DFARS › FAR Part 52: Solicitation Provisions and Contract Clauses › Subpart 52.2

FAR 52.229-7 Taxes—Fixed-Price Contracts With Foreign Governments.

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 governs taxes in fixed-price contracts performed for the U.S. Government in a foreign country. It says the contract price excludes certain taxes or duties that the U.S. and the foreign government have agreed do not apply, and requires the price to be reduced if such taxes were included by mistake. It also sets a $250 threshold below which no price adjustment is made.

Applies to: Fixed-price contracts with foreign governments

What it requires

  • Ensure the contract price does not include taxes or duties that the U.S. and foreign government agreed do not apply
  • Do not include taxes imposed under 26 U.S.C. 5000C in the contract price
  • Reduce the contract price if such taxes or duties were included by error or otherwise
  • Reduce the contract price if, after the contract date, the U.S. and foreign government agree a tax or duty no longer applies

Key terms: Contract date · Tax · Duty · Contract price · 26 U.S.C. 5000C

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

The text

As prescribed in 29.402-1(b), insert the following clause:

Taxes—Fixed—Price Contracts With Foreign Governments (FEB 2013)

(a) Contract date, as used in this clause, means the date set for bid opening or, if this is a negotiated contract or a modification, the effective date of this contract or modification.

(b)(1) The contract price, including the prices in any subcontracts under this contract, does not include any tax or duty that the Government of the United States and the Government of ____ [insert name of the foreign government] have agreed shall not apply to expenditures made by the United States in ____ [insert name of country], or any tax or duty not applicable to this contract or any subcontracts under this contract, pursuant to the laws of ____ [insert name of country]. If any such tax or duty has been included in the contract price, through error or otherwise, the contract price shall be correspondingly reduced.

(2) Taxes imposed under 26 U.S.C. 5000C may not be included in the contract price.

(c) If, after the contract date, the Government of the United States and the Government of ____ [insert name of the foreign government] agree that any tax or duty included in the contract price shall not apply to expenditures by the United States in ____ [insert name of country], the contract price shall be reduced accordingly.

(d) No adjustment shall be made in the contract price under this clause unless the amount of the adjustment exceeds $250.

(End of clause)

Sections it refers to

Sections that refer to it

← 52.229-6 Taxes—Foreign Fixed-Price Contracts. · 52.229-8 Taxes—Foreign Cost-Reimbursement Contracts. →

Rule changes for FAR Part 52

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

FAR 52.229-7 Taxes—Fixed-Price Contracts With Foreign Governments · SpendQuery