[ncc-announce] [GM] Redistribution of RIPE NCC Surplus to Members

Dear colleagues,

At the General Meeting (GM) on 18 November 2015, the RIPE NCC membership
will vote on whether or not to redistribute the expected financial
surplus for 2015 via a rebate to members.

This follows the membership’s approval of an updated Standard Service
Agreement (SSA) in November 2014 that allows members to decide annually
on the allocation of the RIPE NCC surplus or deficit. The November 2015
GM is the first time the members will be asked to vote on this
redistribution, so I would like to outline how this process will work.

A renewed tax ruling with the Dutch tax authorities meant that the RIPE
NCC would have to pay corporate income tax of about 25% on any surplus
it made annually from 2015 onwards. However, the authorities agreed that
the surplus could be reduced to zero by paying an amount equal to the
surplus to members as a rebate if they choose to do so. In 2015, the
RIPE NCC surplus is expected to be approximately EUR 4.2 million, The
exact figure will not be known until after the annual external audit has
taken place.

If the General Meeting rejects the resolution to redistribute the
surplus to members, approximately EUR 1 million (assuming a EUR 4.2
million surplus) would be paid in corporate income tax and the rest of
the surplus would be added to the RIPE NCC Clearing House (reserves).

If members approve the resolution to redistribute the surplus, the
following process would take place:

- The final exact amount to be rebated will be determined at the end of
December 2015 to approximate the surplus as closely as possible

- All those who are members by 31 December 2015 will be entitled to the
rebate according to the formula (set out below)

- The amount to be rebated to each member will be based on the annual
fee paid for all LIR accounts they hold – this includes annual service
fees and Provider Independent (PI) resource assignment fees but does not
include sign-up fees

- Members that joined the RIPE NCC after the first quarter of 2015 will
receive a pro rata rebate that corresponds to the service fee paid

- The rebate will be included on the 2016 invoices – all members will
therefore receive an invoice that shows the service fee for 2016 (EUR
1,400), any PI assignment fees they might have and the rebate marked as
a discount on the invoice

- Members that close before 31 December 2015 will not receive a rebate

- Members that merge before 31 December 2015 will receive only one rebate

- The formula that will be used to decide each member’s individual
rebate is:

Annual fee paid by member / Total annual fee paid by all members X Total
rebate amount = Individual member rebate

In an example where the surplus is EUR 4.2 million and where a member
holds one LIR account and has no PI assignments, the formula would apply
as follows:
1,600 / 20,500,000 X 4,200,000 = EUR 327.80

According to the formula, each EUR 50 PI assignment paid as part of the
annual fee would result in a rebate of approximately EUR 10.24. For a
member with 100 PI assignments, the formula would apply as follows:
1,600 + 5,000 / 20,500,000 X 4,200,000 = EUR 1,352.20

The membership will decide on the surplus redistribution at the upcoming
GM. I ask all members to register to vote - electronic voting is
provided so that all members can participate even if they will not
attend the GM in person. You can register to vote via the GM Preferences
section in the LIR Portal:
https://www.ripe.net/s/gm-registration-nov-2015

All information on the GM is available at:
https://www.ripe.net/participate/meetings/gm/meetings/november-2015

Kind regards,

Axel Pawlik
Managing Director
RIPE NCC

RIPE NCC Standard Service Agreement:
https://www.ripe.net/publications/docs/ripe-626

RIPE NCC Clearing House Procedure:
https://www.ripe.net/publications/docs/ripe-625