[Inpycon] Budget and sponsorship.

Sun May 20 06:24:16 CEST 2012

Just realised my comments could lead to a whole bunch of questions on
taxation and currency laws. So with an intent to specifically refocus on
the impact of that on what we do (rather than the legal details
themselves), here's my understanding (open for agreement or contesting)

a. We can accept foreign currency sponsorships
b. Sponsorship grants to us may not be tax deductible in countries of the
sponsor
c. We may end up having to pay more tax on the amounts
d. Its better to offset foreign currency expenditure (primarily speaker
travel and any other associated speaker expenses) by a foreign third party
directly footing the bill. For all other expenses, it really doesn't matter.

Dhananjay

On Sun, May 20, 2012 at 9:24 AM, Dhananjay Nene <dhananjay.nene at gmail.com>wrote:

>
>
> On Sun, May 20, 2012 at 6:45 AM, Anand Chitipothu <anandology at gmail.com>wrote:
>
>>  As I start collating all this into a doc, this starts being a slightly
>> dicey
>> > one.
>> >
>> > a) The exact amount is variable - which could be a slight issue for
>> someone
>> > willing to commit
>> > b) Some of the issues I suspect are due to the fact that remittance
>> could be
>> > in foreign exchange and part of the expenditure (eg. ticket but not the
>> > hotel) are in foreign exchange.
>>
>> We can ask the sponsor to book the hotel via Cleartrip or some other
>> website. That way we don't have to worry about foreign exchange.
>>
>> Precisely my thought
>
>
>> > c)  If the amount is not the same as standard slabs it becomes a little
>> hard
>> > for us to figure out exactly what to offer for this - is this a new
>> slab?
>> > How does one slot it between existing slabs etc.
>> >
>> > I instead propose that we allow any Gold or Platinum sponsor the
>> following
>> > treatment :
>> >
>> > a) Also announce amount in $ slabs. ie. work out what a Gold or Platinum
>> > slab will cost in USD terms.
>> > b) Allow the sponsor to elect to pay for the speaker expenses. It
>> should be
>> > fine if the speaker expenses include local stay and allowances as well
>> in
>> > that amount so long as the speaker gets it directly from the sponsor and
>> > uses it for the local expenses. We should still grant the sponsor the
>> > equivalent treatment of the gold / platinum sponsor so long as they
>> treat
>> > the remainder of the amount as a contribution towards Pycon India
>> > sponsorship. (ie. the exact sponsorship amount remitted to IPSS will be
>> the
>> > difference between the slab and the speaker expenses directly
>> reimbursed,
>> > though the sponsor will get the full benefits of the slab he chooses).
>> > c) My only slight reservation is that the speaker expenses could end up
>> > being > 1.5 lakhs if the rupee continues to depreciate further. So it
>> might
>> > make sense to have the sponsorship $ amounts as being $3500 (instead of
>> > $2800 as per current exchange rate). One may want to consider raising
>> the
>> > local sponsorship gold slab to 1.75 lakhs instead of the 1.5 lakhs and
>> treat
>> > the equivalent foreign currency amount as USD 3500. Thats what I would
>> > recommend.
>> >
>> > In light of this suggestion, the sponsorship amounts will be
>> >
>> > Platiinum : 3,00,000 INR  or 6,000 USD for foreign sponsors
>> > Gold : 1,75,000 INR or 3,500 USD for foreign sponsors
>> > Silver: 1,00,000 INR or 2,000 USD for foreign sponsors
>>
>> I'm not sure if we can accept remittence in USD. So suggesting a USD
>> equivalent and not being able to accept USD when a foreign sponsor is
>> ready won't be a good situation.
>>
>> That is not correct. We can accept remittances. Its tax treatment is
> different and the amount of paperwork needed to get/pass on tax breaks is
> just huge. Its really a taxation issue and assumiing one doesn't do all the
> paperwork (which is really onerous), the taxation impact could be large
> (Sree to clarify if I misstated anything).  I suspect if we just go ahead
> and pay say a 33% tax on the incoming forex w/o doing the paperwork, its
> still a reasonable amount of money rather than not accepting it all. (AFAIK
> Indian currency sponsorships - we don't get taxed and the sponsors get a
> tax break on the amount).
>
>
>> So we first need to find out what are the expenses that can be paid
>> directly by foreign sponsors. Travel and hotel is one of them.
>>
>> If it is not possible to accept USD and if there are no other expenses
>> that can be paid directly in USD, there is no point specifying USD
>> equivalents. We can just create a new slab Travel Sponsorship.
>>
>> Also, it may not be necessary to strictly match the local and foreign
>> sponsorship amounts. I don't see an issue with have Rs. 1.5L and $3500
>> as the amount for gold slab.
>>
> I generally think foreign currency conversion rates should be fair at
> least at the point in time they are applied (future fluctuations
> notwithstanding). At 1.5L & $3500 they aren't imo. For a bulk of the past
> year these have been hovering around 1USD = 50 INR. The above conversion
> treats 1USD = 42 INR and  the current rates are 1USD = 54INR)
>
>>
>> I think 3L for platinum might be too high. What Sreekanth suggest
>> sounds reasonable to me. May be we can push it a bit higher and
>> roundoff.
>>
>> Silver: Rs. 75,000/- ($2000)
>> Gold: Rs. 1,50,000/- ($3500)
>> Platinum: Rs. 2,50,000/- ($5000)
>>
> More thoughts on the amounts? I still believe 3/1.75/1 is a good set of
> slabs to have.
>
>>
>> Anand
>>
>
>
>
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>
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>
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