Re: Constitution - formal proposal (v0.5)
SPI is incorporated in the US, so none of your discussion of the British
tax laws is of any consequence. Ian, as project leader, collects no money
and has no control over SPI, and should have no liability here or at home.
SPI is, I believe, incoporated as non-profit (or the papers are being
filed). SPI collects donations for Debian and administers the money for
us. Debian, technically doesn't own anything. Not even our DNS entries.
SPI was establised as a shield, or umbrella, under which Debian could
opperate without the need to deal with the monetary aspects of the
project. Because of hard feelings among its board, it seems that this
"close" relationship has erroded somewhat, to the detriment of all
involved.
On Fri, 3 Apr 1998, Oliver Elphick wrote:
> 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
> reality.
> --
> Oliver Elphick Oliver.Elphick@lfix.co.uk
> Isle of Wight http://www.lfix.co.uk/oliver
>
> PGP key from public servers; key ID 32B8FAA1
>
>
>
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>
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