123STA T .864PUBLIC LA W 111 – 8 —M A R .11 , 2 0 0 9det e rmin e s,fol lo w in gc ons u lt a tions wit h the C ommittees on Ap pro - priations, that assistance to such countr y is in the national interest of the U nited S tates .PROHIB I T IO N ONT AX ATION O FU NIT EDS TATES ASSISTAN C E SEC. 7013 . ( a )P ROHIBITION ON T AXATION. —N one of the funds appropriated under titles I II through V I of this Act may b e made a v ailable 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 e x empt from taxation, or reimbursed, by the foreign govern- ment, and the Secretary of State shall expeditiously see k to nego- tiate amendments to existing bilateral agreements, as necessary, to conform with this re q uirement. (b) R EI M BURSEMENT OF F OREI G N TAXES.—An amount equiva- lent to 2 00 percent of the total taxes assessed during fiscal year 200 9 on funds appropriated by this Act by a foreign government or entity against commodities financed under United States assist- ance 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 2010 and allocated for the central government of such country and for the W est B ank and G a z a 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) D E M INIMIS E XCEPTION.—Foreign taxes of a de minimis nature shall not be sub j ect to the provisions of subsection (b). (d) REPROGRAMMING OF FUNDS.—Funds withheld from obliga- tion 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 Commit- tees on Appropriations at least 1 5 days prior to exercising the authority of this subsection with regard to any country or entity. (f) IMP L EMENTATION.—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 Regulations.
