Program and Grant Revenue
Columbia is not exempt from income tax in most countries. Columbia-related local entities may be either tax-exempt or for-profit. Therefore, any Columbia activity overseas that produces some form of revenue may expose Columbia to taxation in the country where the activity occurs. Even where no revenue is produced, Columbia may incur filing requirements.
Where a Columbia unit sells goods or services (e.g. books, Executive Education, etc.) abroad, it may be required to collect tax on that revenue and pay the tax to the jurisdiction where the sale was made. Such a tax goes by various names, including sales tax, service tax, goods-and-services tax (GST), or value-added tax (VAT). To pay the tax, Columbia or a related entity will typically need to be registered with the appropriate tax authority; this requires prior consultation with the Office of the General Counsel (OGC) and the Tax unit of the Office of the Controller.
Some countries tax funds that leave the country, often including grant funds. This may take the form of a “withholding tax” on payments to non-resident individuals or corporations, such as Columbia. Where they exist, withholding taxes typically range from 10%-35% of the amount received.
When preparing grant proposals for overseas funders, be sure to consider potential withholding taxes in your budget. Projects may in some cases be able to minimize these taxes, though the strategies for doing so will vary depending on the facts of each case. Potential tax reduction strategies may include: working through local partners (who may be able to receive the funds without a withholding tax), spending more of the funds in country (e.g. by paying travel expenses for Columbia staff in-country rather than from New York), or receiving the funds through an intermediary.
Long-term projects and sites may have difficulty repatriating funds to the U.S. Prior to funding or capitalizing an overseas project beyond what is necessary for immediate expenses, consider how to recover any unspent funds that may remain after the project is completed.
In most countries, Columbia and its related entities are not registered as tax-exempt organizations and/or are only exempt from income taxes. Therefore, Columbia departments must pay tax such as sales tax, value added tax (VAT), goods and services tax (GST) on overseas purchases.