Taxation Requirements for Income for International Programs

Projects that generate revenue and/or have expenses in a foreign country funded from the U.S. may be subject to local taxation requirements which have budget impacts and are often complicated and compliance is administratively burdensome. This page provides general information on how revenue may be "sourced" to a foreign jurisdiction.

Tax law varies from country to country, however most countries have similar methodology regarding how revenue is "sourced" to that country. It should be noted that even though Stanford is a tax-exempt organization in the United States, that does not mean it will be treated as such in a foreign country. In most cases, Stanford will be treated like any other for-profit company.

Below are some examples in which Stanford may be subject to local taxation.

Generating Revenue

Revenue generated or earned in-country, either online or on-the-ground, may become subject to local taxation, even if income is received in the U.S.

Revenue Generated from Online Offerings

These include tuition or fees for services provided over the internet (e.g., online classes or distance learning) where the recipient is not located in the U.S. In some cases, revenue generated may be taxed by the country in which the recipient resides.

Revenue Generated in a Foreign Country

Examples of this situation are executive education and continuous professional studies provided in-country, particularly in those countries where Stanford has a Presence.

NOTE: Office of General Counsel should be consulted in advance of online course offerings so that course content can be protected, and licensing requirements and consumer protections be addressed. If you're conducting courses, be aware that participants should be run through Restricted Party Screening on Stanford's Restricted Party Screening website.

Incurring Expenses

When the activity in-country triggers a Presence or if the activity takes place in a location where Stanford already has a Presence, the activity may become subject to local taxation. Depending on the country and the Presence, it is possible that any expenses incurred in that country and the funding (revenue) that offsets those expenses could be treated as locally "sourced" and therefore reportable to the local tax authorities. There are also instances where the activity could be combined with other Stanford activities in the jurisdiction and all of the activity becomes reportable.

What's Next?

Submit a Support Request to Global Business Services (GBS) to help plan and budget for potential tax implications:

• If your project will be generating income outside the U.S.,
• Your activity triggers a Presence, or
• You have an activity in a country where Stanford has a Presence.