[pcthrowaway]

While we're here, does anyone know if a sole proprietorship donating to OS projects for "sponsorship" (aka listing the donor company's name in the project's github) is deductible as Advertising expenses? Specifically wondering about Canada personally, but I'm sure people in the U.S. would benefit from this knowledge as well.

Our tax law (in Canada) is so opaque, and I feel like finding ways for these monetary contributions to be deductible as business expenses would make it so much easier for businesses to justify the expense.

If donations can't be written off, OS projects would then do well to add a paid tier with some useless exclusive functionality, just so donors can make it a software expense.

[unmole]

> While we're here, does anyone know if a sole proprietorship donating to OS projects for "sponsorship" (aka listing the donor company's name in the project's github) is deductible as Advertising expenses?

It is deductible in India.

Disclaimer: I'm not a lawyer, chartered accountant. Nothing I ever say should be construed as legal advice etc.

> Our tax law (in Canada) is so opaque

I was going to dismiss it as something people in every country complain about but then I tried to look it up myself:

Depending on where you're advertising, you might be entitled to either a 100% deduction, a 50% deduction or no deduction at all. And you need to take into account if the publication has atleast 80% original content to figure out the deduction. Seriously, WTAF is that?!

[pcthrowaway]

Oh it's even worse, it mainly talks about advertising in "periodicals", but doesn't say anything about internet advertising (such as social media ads, paid sponsorships with influencers, sponsoring a github repo, etc.)

    You can deduct expenses for advertising, including advertising in Canadian newspapers and on Canadian television and radio stations. You can also claim any amount you paid as a finder's fee.

    Certain restrictions apply to the amount of the expense you can deduct for advertising in a periodical. You can deduct all the expense if your advertising is directed at a Canadian market and the original editorial content in the issue is 80% or more of the issue's total non-advertising content.

    You can deduct 50% of the expense if your advertising in a periodical is directed at a Canadian market and the original editorial content in the issue is less than 80% of the issue's total non-advertising content.

    You cannot deduct expenses for advertising directed mainly at a Canadian market when you advertise with a foreign broadcaster.

That section about the periodical having >=80% "editorial content" (whatever that means) is going to age well with LLM material sneaking in.

[SoftTalker]

Talk to an accountant. As I understand it, in the USA, "donations" are not deductible unless they are to a bona-fide charity/501(c)(3) type of organiztion.

To be deductible as advertising, I would think the payment would need to be be explicitly for advertising services, not a dontation with the side-effect that you are recognized and thanked on a list of donors. That's just a courtesy, not an advertisement.

[pcthrowaway]

Hmm.. I would hope it's deductible if the software listed sponsorship as an advertising service, and put a price on the services accordingly.

I can't imagine this is too different from paying a youtube or social media influencer to promote your product, or paying for an ad spot on a podcast.