[Iasa20] outside the US [was Answers]

[Brian E Carpenter <[e-mail]>]

On 15/03/2018 02:42, Alissa Cooper wrote:
...>>> 4. We’d like to understand whether it would be possible for the IETF administrative entity to be incorporated outside of the US under options 2 and 3, and if so, how the administrative complexities compare to incorporating the entity in the US.
>>
>> This appears to be quite complicated. Across a survey of jurisdictions, the issues to address would include understanding the local tax laws, the intersection with US tax laws, jurisdiction for tax receipts, analysis of what is deductable, etc.; rules for obtaining non-profit status; employment rules and regulations; requirements for banking, bank transfers between jurisdictions, and transfer pricing; and numerous other issues. Although ISOC does have an office in Geneva, that would not help to bootstrap the process of incorporating in Switzerland in any particular way.
>>
>> The lawyers may follow up with more detail here.
> 
> The Morgan Lewis attorneys recommend against this for several reasons.  Individual and corporate taxpayers in the U.S. could not take a charitable contribution deduction for donations unless the entity is incorporated under U.S. law.  In addition, there may be some limitations as to the ability of ISOC and its affiliates to provide financial support if the organization is created outside the U.S.  Finally, if the organization will conduct activities in the U.S., it may need to apply for U.S. tax exemption and comply with the tax laws of both the U.S. and the other country, creating unnecessary administrative burdens. 

To be frank that's a pretty US-centric response. What if a sponsor or donor could get a
tax deduction if donating to an entity in the European Union, but not the US? What if
10 years from now our major sponsorship starts to come from neither Europe nor the US?

Maybe the correct question is entirely different. How can we help non-US based
sponsors make tax-efficient donations?

(From a practical point of view, I certainly see that US incorporation is simplest.)

    Brian