The Department of Defense (DoD) has issued a Final Rule intended to clarify that U.S. defense contractors and subcontractors performing work in Afghanistan, including work on contracts below the simplified acquisition threshold and for commercial items, are not subject to Afghan taxes. 

The rule updates the tax provisions of the Defense Federal Acquisition Regulation Supplement (DFARS) to reference the Bilateral Security Agreement signed by the U.S. and Afghanistan in 2014, which was much more explicit in its exemption of U.S. contractors from Afghan tax obligations than assorted prior agreements between various United States agencies and the Afghan Government, which arguably included similar exemptions.

Keep reading this article at: http://www.insidegovernmentcontracts.com/2016/01/dod-final-rule-clarifies-application-of-afghan-taxes-to-contractors/