A payment from a non-U.S. sponsor to MIT may be subject to tax in the home country of the sponsor. This tax often is referred to as withholding tax. If a tax treaty exists between the country of the sponsor and the U.S., an exemption from withholding tax or a lower withholding tax may exist.
Withholding requirements may affect the level of funding available to your DLC’s project. MIT’s practice is to ask the sponsor to pay for any applicable taxes to ensure that the amount of funding your DLC receives is not reduced.
In some countries (India, for example), a sponsor can make a payment to MIT only after MIT provides certain documentation to the sponsor along with a copy of Form 6166, which verifies MIT’s tax residency in the U.S. If withholding tax is due on funding from the sponsor, always ask the sponsor to send MIT a copy of the documentation confirming that the withholding tax liability has been properly discharged.
Contact Jodi Kessler if you need assistance with withholding tax compliance.
The Details
A payment from a non-U.S. sponsor to MIT may be subject to tax in the home country of the sponsor. This tax often is referred to as withholding tax. If a tax treaty exists between the country of the sponsor and the U.S., an exemption from withholding tax or a lower withholding tax may exist.
Withholding requirements may affect the level of funding available to your DLC’s project. MIT’s practice is to ask the sponsor to pay for any applicable taxes to ensure that the amount of funding your DLC receives is not reduced.
In some countries (India, for example), a sponsor can make a payment to MIT only after MIT provides certain documentation to the sponsor along with a copy of Form 6166, which verifies MIT’s tax residency in the U.S. If withholding tax is due on funding from the sponsor, always ask the sponsor to send MIT a copy of the documentation confirming that the withholding tax liability has been properly discharged.
Contact Jodi Kessler if you need assistance with withholding tax compliance.
