[Qgis-psc] Bad news: negative reply from Zurich tax office

[Jeff McKenna]

Dear Andreas,

As someone who was in your shoes for many years for OSGeo, I must say to 
not be discouraged.

 From my years of talking with other foundation leaders and watching, 
listening etc, I've noticed some interesting points:

- in 2017 a non-profit foundation did a lot of research and chose 
Singapore as the best place to register for many reasons including tax 
exempt status: https://blog.ghost.org/moving-to-singapore/

- a 2017 article on several different non-profit organizations in Europe 
and why they chose a specific country to register (Netherlands, Germany, 
etc): https://lwn.net/Articles/713073/

Also, even OSGeo's history, and reasons, can help give ideas as you 
travel down this path:



It took the OSGeo foundation 8 long years of battling, to finally 
achieve tax exempt status (credit to the early work of Tyler and 
Daniel).  To be fully honest, even in the 8th year we were stuck, but 
all along I was talking to other foundations, watching what was 
happening, asking questions to other leaders, back and forth; then one 
day in 2014 I noticed another foundation, OpenNTF, mention of their own 
success by changing to a "Social Welfare Organization" for the IRS tax 
people.  I mentioned this to the OSGeo Board, and our lawyer changed our 
application to that type, and our tax exempt application was quickly 
approved.  (!!?!!)

Now you might say 'yes but OSGeo is registered in the United States, 
what similarities are there for here' but I really feel that getting to 
know why OSGeo (and other foundations) choose to register in one 
location over another, can really help QGIS.ORG down this path.  For 
example, why do most fortune500 companies register in the U.S. state of 
Delaware (as OSGeo did): 
https://www.americanbar.org/publications/blt/2016/11/01_leitner.html

That article lists many reasons, that you could use as check points in 
your search for QGIS.ORG and the right location.

(to be fully honest and open here, as a Canadian I too often wondered 
why OSGeo chose, of all places, to register in Delaware, but after a 
long time I can understand the reasons why, as I'm not a lawyer at all)

Hope some of that history helps.

-jeff



On 2018-01-29 3:51 PM, Andreas Neumann wrote:
> Dear PSC members and community,
> 
> Unfortunately I got a negative reply for my application of tax exemption 
> from the Zurich tax office. For those who can read German I attach the 
> letter.
> 
> They claim that our statutes imply that we follow an economic intent, by 
> dealing with software development, bug fixing and marketing of free 
> software. They also state, that in general they don't do tax exemptions 
> for Open Source associations. Clearly, they don't understand how Open 
> Source works.
> 
> This comes at a real surprise to me, because when I had a look at the 
> list of tax-exempted organizations in Zurich, that seem to follow quite 
> clearly an economic intent, whereas I have the impression that there is 
> a lot of voluntary work going into QGIS with the intent to make GIS 
> software available to the ones who otherwise could not afford to use GIS 
> software. Because the german QGIS user group got tax exemption in 
> Germany, I had the impression that a similar thing in Switzerland is 
> only a formality - apparently not.
> 
> What are the next steps? First I will ask other Open Source 
> organizations in Switzerland about this topic and if they think, 
> something could be done about it. Otherwise, I will suggest, that we 
> move our organization to a country that better values all the voluntary 
> efforts that go in to Open and free software. Any suggestions of other 
> countries who may host QGIS.ORG international?
> 
> For the budget, it will mean that I can't commit to additional QGIS 3 
> bug fixing currently - I will set aside a couple thousand Euros for tax 
> payments.
> 
> I also don't know how to deal with VAT in upcoming sponsorship invoices 
> - should I add the 7.7% VAT on top of the sponsorship amounts, or should 
> we declare that the sponsorship already includes VAT, meaning that from 
> a € 500.- sponsorship we can only keep € 461.5 ?
> 
> Any opinions and suggestions?
> 
> Anyway - I deeply apologize for my failing to deal with the matter - and 
> I apologize for the misbehaviour of my country's tax office. Apparently, 
> people and organizations are not "equal" in my country. While very 
> powerful organizations like the world soccer organization (FIFA), the 
> olympics and the world economic forum are tax exempt - organizations 
> that have turnovers in the billions - small organizations with lots of 
> voluntary people like QGIS cannot be tax exempt. I am personally very 
> disappointed.
> 
> Andreas
> 
> 
>