Tax exemption for the purchase of new construction or renovation materials and services by contractors for diplomatic and consular premises may be allowed when the requesting mission is obligated to the vendor for the purchase price and has title to all material and supplies. A separate purchasing agent arrangement request must be made to the Department of State for each project.

The Office of Foreign Missions considers the purchasing agent arrangement  privilege to be derivative of the treaty privilege for tax-exemption for purchase by a mission of goods and services. Each mission enjoys tax-exemption on a reciprocal basis with the United States government. Any adverse change in mission tax treatment towards the United States government in the sending state may jeopardize purchasing agent arrangements and mission privileges in the United States.

Before the Office of Foreign Missions will entertain a request for purchasing agent arrangement privileges, the requesting Mission must provide official written confirmation that the Government of the sending state will grant reciprocal purchasing agent arrangement privileges upon request of the U.S. Embassy. The Department expects that those countries that operate on a Value Added Tax system will grant either a zero-rating (i.e. relief for the U.S. Embassy, its contractors and subcontractors from the up-front payment of a VAT on all goods and services) or swift and complete reimbursement of payment of VAT in order to grant tax exemption in the United State in return.

Missions must first seek and receive the Department’s approval to undertake a new construction or renovation project before requesting a purchasing agent arrangement.  Once the Mission receives approval to renovate, the purchase agent arrangement must include the following information:

  • Name of the purchasing agent contractor and subcontractor(s) (include a copy of each business card, if available)
  • Address of the construction or renovation project
  • Type of property (office premises or residence)
  • Permit number(s)
  • Expected start and completion dates of the project
  • Estimated cost of the project
  • Copy of the mission tax card that will be used for purchases
  • A statement that the government of the sending State will grant reciprocal privileges upon request of the U.S. Embassy

This information will enable the Department’s Office of Foreign Missions to authorize and confirm that a contractor is a purchasing agent for the mission’s construction or renovation project and is eligible to use the mission’s tax exemption card for the purchase of goods, materials and services for such a project.

U.S. Department of State

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