Although MIT is a tax-exempt organization in the U.S. and is exempt from certain taxation related to its charitable activities, MIT is generally not exempt from tax liability in other countries.
Given the tax implications, MIT does not want to carry out activities in-country that are considered by the local tax authority as evidence of a permanent establishment, or “PE.”
Anyone planning an international project should also consider withholding tax implications. MIT typically asks the sponsor to pay withholding tax to ensure adequate funding is available for the activities of the program.
Please let your Research Administration Services (RAS) Contract Administrator or Office of Strategic Alliances and Technology Transfer (OSATT) Catalyst know if your program plans to have more than incidental activity or presence in a foreign country. With advance planning, we can help mitigate uncertainty and risk.