Pub. L. 112-74, div. I, tit. VII (as amended)

7013.(a)Prohibition on Taxation.—None of the funds appropriated under titles III through VI of this Act may be made available to provide assistance for a foreign country under a new bilateral agreement governing the terms and conditions under which such assistance is to be provided unless such agreement includes a provision stating that assistance provided by the United States shall be exempt from taxation, or reimbursed, by the foreign government, and the Secretary of State shall expeditiously seek to negotiate amendments to existing bilateral agreements, as necessary, to conform with this requirement.(b)Reimbursement of Foreign Taxes.—An amount equivalent to 200 percent of the total taxes assessed during fiscal year 2012 on funds appropriated by this Act by a foreign government or entity against commodities financed under United States assistance programs for which funds are appropriated by this Act, either directly or through grantees, contractors and subcontractors shall be withheld from obligation from funds appropriated for assistance for fiscal year 2013 and allocated for the central government of such country and for the West Bank and Gaza program to the extent that the Secretary of State certifies and reports in writing to the Committees on Appropriations that such taxes have not been reimbursed to the Government of the United States.(c)De Minimis Exception.—Foreign taxes of a de minimis nature shall not be subject to the provisions of subsection (b).(d)Reprogramming of Funds.—Funds withheld from obligation for each country or entity pursuant to subsection (b) shall be reprogrammed for assistance to countries which do not assess taxes on United States assistance or which have an effective arrangement that is providing substantial reimbursement of such taxes.(e)Determinations.—(1)The provisions of this section shall not apply to any country or entity the Secretary of State determines—(A)does not assess taxes on United States assistance or which has an effective arrangement that is providing substantial reimbursement of such taxes; or(B)the foreign policy interests of the United States outweigh the purpose of this section to ensure that United States assistance is not subject to taxation.(2)The Secretary of State shall consult with the Committees on Appropriations at least 15 days prior to exercising the authority of this subsection with regard to any country or entity.(f)Implementation.—The Secretary of State shall issue rules, regulations, or policy guidance, as appropriate, to implement the prohibition against the taxation of assistance contained in this section.(g)Definitions.—As used in this section—(1)the terms taxes and taxation refer to value added taxes and customs duties imposed on commodities financed with United States assistance for programs for which funds are appropriated by this Act; and(2)the term bilateral agreement refers to a framework bilateral agreement between the Government of the United States and the government of the country receiving assistance that describes the privileges and immunities applicable to United States foreign assistance for such country generally, or an individual agreement between the Government of the United States and such government that describes, among other things, the treatment for tax purposes that will be accorded the United States assistance provided under that agreement.(h)Report.—The Secretary of State shall submit a report to the Committees on Appropriations not later than 90 days after the enactment of this Act detailing steps taken by the Department of State to comply with the requirements provided in subsections (a) and (f).