International Compliance


Although MIT is considered a non-profit, tax-exempt entity in the United States, many foreign governments may not recognize this status.

Individual countries have specific laws governing outside educational institutions doing business within their borders. The goal of the MIT Tax department is to be compliant with those laws. For instance, every country has its own set of rules for creating a Permanent Establishment (PE) in that country. For several reasons, MIT does not want to create a PE in foreign countries. Some simple ways of avoiding PE are:

  1. Do not rent or lease office space.
  2. Do not open a bank account.
  3. Do not sign any contracts in the foreign country.
  4. When possible, make payments from inside the U.S.
  5. Limit days spent in the foreign locale.

If your DLC is considering conducting a program abroad, please contact either Jim Morgan in the Office of Major Agreements (OMA) at jlmorgan@mit.edu or 3-2749 or Long Tran at lctran@mit.edu or 2-4532 and let them know your plans. The further in advance that you are able to contact Jim or Long with the facts of the program, the more beneficial it would be.

For DLCs that are considering sending their employees for more than 30 days to a specific country, please contact Jim Morgan or Long Tran. Depending on the country and length of stay, the employee may be required to file and pay income taxes in that country.