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Re: Constitution - formal proposal (v0.5)

Ian Jackson wrote:
  >Oliver Elphick writes ("Re: Constitution - formal proposal (v0.5) "):
  >> I think (any lawyers in the house?) that you should not allow any 
  >> implication that Debian owns any property or has any income.  Otherwise
  >> you may find yourself with an unexpected and unwelcome Corporation
  >> Tax demand, addressed to you as an officer of an unincorporated 
  >> association deemed to be controlled from the United Kingdom.  SPI
  >> may hold property in trust for certain purposes, but not for Debian
  >> as an entity, or the tax consequences may follow...  The involvement
  >> of an offshore trust may make things even worse: I'm not up-to-date
  >> on my tax law.
  >How close are you to actually being a lawyer ?  My tax law is pretty
  >much nonexistent, and my US tax law definitely so.  I do have a friend
  >who was an expert on trusts, and may know something about their tax
  >consequences, but I'd rather get the details from an American.
I'm an accountant, but haven't worked in practice for 15 years, so I'm
not up to date, as I say.  I'm thinking of British tax law; a corporation
(which includes unincorporated associations such as Debian) can be taxable
in Britain if its affairs are controlled from here.  I've never heard of
any case law on where control is exercised when meetings are held
electronically. It would be fascinating, but expensive, to get the legal
position sorted out, and I think that that would be best left to other
organisations to do!

The Inland Revenue could claim that Debian is controlled from here
because you are here; since control is done by meetings over the Internet
rather than by physical presence, that is at least as likely an answer
as any other.  The point is that if they make an assessment it is up to
you to disprove their case, and you are personally liable because Debian
is not incorporated as a separate legal person.  There is also the matter
of penalties for not making returns in time; better to ensure that there
is nothing to make returns about.

Even if it is held that Debian is not resident in Britain, it would be
taxable on income arising in Britain.

If Debian were a charity, there would not be a problem; it is arguable that
it is, on the grounds that it operates for purposes `beneficial to the
community'.  However, the only way to get this definitively established is
to register under the Charities Act; without that, you would have to argue
the case with the Inland Revenue.

With an international organisation, you have the additional problem of
overlapping and conflicting jurisdictions, double taxation treaties and
different definitions of what is taxable.  I suppose that the only
reason why this hasn't arisen before is that organisations like
Debian are really unprecedented and governments haven't caught up with
Oliver Elphick                                Oliver.Elphick@lfix.co.uk
Isle of Wight                              http://www.lfix.co.uk/oliver

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