Guide section list
Comprehensive reference guide
Taxes, including Value Added Tax (VAT)
Subpart E: Cost Principles
Text Accordion Closed
200.470 Taxes (including Value Added Tax)
In general, taxes which the University is required to pay and which are paid or accrued in accordance with GAAP, and payments made to local governments in lieu of taxes which are commensurate with the local government services received are allowable, except for: (i) taxes from which exemptions are available to the University directly or which are available based on an exemption afforded the Federal government and, in the latter case, when the Federal awarding agency makes available the necessary exemption certificates, (ii) special assessments on land which represent capital improvements, and (iii) Federal income taxes.
Any refund of taxes, and any payment to the University of interest thereon, will be credited either as a cost reduction or cash refund, as appropriate, to the Federal government. Interest will be repaid only to the extent that such interest accrued over the period during which the University was reimbursed by the Federal government for the taxes, interest, and penalties.
Foreign taxes charged for the purchase of goods or services (Value Added Tax) that a non-Federal entity is legally required to pay in country is an allowable expense under Federal awards.
Explanation Accordion Closed
Taxes are allowable costs, except those for which an exemption is available, e.g. research, special assessments on land, and income taxes.
The most significant change is that Value Added Taxes (VAT) are allowable expenses under the Uniform Guidance.
Application Accordion Closed
Agency prior approval is not required.
Include anticipated tax costs in the proposal budget.
Ensure that any tax refunds or applicable credits are credited to the awarding agency.
Related NAU policies/procedures: Accordion Closed
To be developed