This summary of tips and resources will help you to identify and prepare for possible hurdles related to your DLC’s activities abroad.

Review MIT’s guidance on permanent establishment

Sending an MIT employee to a foreign location can create consequences for both the employee and MIT. As a general rule, MIT does not want your DLC to create a taxable presence (“permanent establishment”) outside the United States since doing so can jeopardize both the funding and future of your program. Overseas employment is the most common trigger of a taxable presence, so please conduct as much of your program’s activities as possible in the U.S. and limit the number of days MIT employees need to spend in foreign countries.

Other common triggers of a taxable presence in a foreign country include:

  • signing contracts on behalf of MIT
  • renting or leasing office space or major equipment for MIT
  • opening bank accounts on behalf of MIT
Consult with MIT’s International Coordinating Committee (ICC)

MIT employees working outside the United States may be subject to local labor, employment, and visa requirements. Depending on the nature and length of the stay, an employee also may become subject to income tax in that country. Finally, and as noted above, an employee who is sent abroad for an extended period of time, or is a frequent traveler to one country, may create a taxable presence for MIT in that country.

If you need more information, contact Jodi Kessler or Drew Wheadon. They work closely with MIT’s International Coordinating Committee (ICC) and can provide additional resources and guidance.

The Details

Review MIT’s guidance on permanent establishment

Sending an MIT employee to a foreign location can create consequences for both the employee and MIT. As a general rule, MIT does not want your DLC to create a taxable presence (“permanent establishment”) outside the United States since doing so can jeopardize both the funding and future of your program. Overseas employment is the most common trigger of a taxable presence, so please conduct as much of your program’s activities as possible in the U.S. and limit the number of days MIT employees need to spend in foreign countries.

Other common triggers of a taxable presence in a foreign country include:

  • signing contracts on behalf of MIT
  • renting or leasing office space or major equipment for MIT
  • opening bank accounts on behalf of MIT
Consult with MIT’s International Coordinating Committee (ICC)

MIT employees working outside the United States may be subject to local labor, employment, and visa requirements. Depending on the nature and length of the stay, an employee also may become subject to income tax in that country. Finally, and as noted above, an employee who is sent abroad for an extended period of time, or is a frequent traveler to one country, may create a taxable presence for MIT in that country.

If you need more information, contact Jodi Kessler or Drew Wheadon. They work closely with MIT’s International Coordinating Committee (ICC) and can provide additional resources and guidance.

Did You Know?

VPF has assembled a dedicated team to support your DLC’s global operations. Visit the Global Support page of this website to learn more.
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