In-kind Contributions: Taxation of International Consortium Workers

Abstract

In 2009, consistent with its objective to support and develop a European research infrastructure, the European Union (EU) created a new organizational form for research collaborations: the European Research Infrastructure Consortium (ERIC). Since then, 21 different ERICs have been established in the EU Member States; the largest being the European Spallation Source (ESS). The financing of this ERIC is dependent on in-kind contributions of goods and labour from the various Member States of the ERIC. This model of financing the ERIC instigates questions about which state has the right to tax that labour. In terms of taxation of the workforce, the ERIC is different compared to EU institutions or international research organizations such as the European Organization for Nuclear Research (CERN) for which taxes are levied at an organizational level rather than at a state level. This entails that the taxation of the workforce of the ERIC becomes more complex as the allocation of taxing rights on a state level is dependent of the applicable tax treaties entered into between the host states of the ERIC and Member States that are contributing towards the construction of the ERIC. Accordingly, the income from the work performed by the personnel may fall both within the scope of Article 15 as well as Article 19 of the OECD Model Tax Convention. European Research Infrastructure Consortium (ERIC), European Spallation Source (ESS), European Organization for Nuclear Research (CERN), OECD, Article 15, Article 19, public legal entities, government service, income from employment, in-kind contribution.