The Tax Law of Charitable Giving, 6th Edition

CHAPTER EIGHTEENInternational Giving by Corporations

• § 18.1 Contributions to U.S. Charities for Foreign Use
• § 18.2 Contributions of Money from Foreign Affiliate of U.S. Parent to Foreign Charities
• § 18.3 Contributions of Goods or Services to Benefit Foreign Charities
• § 18.4 Grants of Funds from U.S.-Related Foundation to Foreign Charities
  • (a) Taxable Expenditures Law
  • (b) Charitable Purpose
  • (c) Expenditure Responsibility
  • (d) Foreign Grantee Categories
  • (e) Grants to Charitable Organizations and Equivalents
  • (f) IRS Simplified Procedure
  • (g) Grants to Other Organizations

A dynamic aspect of the global market environment is the extension of corporate philanthropy practiced by American companies doing business abroad. The tax law of the United States imposes certain limitations on overseas charitable giving, depending on the character of the donor and the donee. These constraints are by no means barriers to transborder corporate giving. A U.S. corporation that is planning to conduct philanthropic activities in a foreign country has several methods available for transferring contributions abroad.

§ 18.1 CONTRIBUTIONS TO U.S. CHARITIES FOR FOREIGN USE

A U.S. corporation may deduct up to 10 percent of its pretax net profits¹ for gifts made to U.S. charitable corporations² as charitable contributions,³ even though the gift may ultimately be used overseas. Certain adjustments to pretax net profits are required for purposes of this computation.⁴ A corporate charitable contribution ...