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Promotional scholarship in addition to income

May 27, 2010 | 20,00 EUR | answered by Michael Herrmann

I am employed and work 32 hours per week. I have been offered a part-time doctoral program with a doctoral scholarship of 1000.00 euros. Do I have to pay taxes on this?

Michael Herrmann

Dear inquirer,

First of all, thank you very much for your inquiry, which I would like to answer based on the information provided and in the context of your commitment in a first consultation. The answer is given in accordance with the facts presented. Missing or incorrect information about the actual circumstances can affect the legal outcome.

In principle, the scholarship is taxable income. In certain (standard) cases, § 3 No. 44 EStG provides for a tax exemption. The provisions are quite detailed, so I can only provide you with the current wording:

"44. Scholarships granted directly from public funds or from intergovernmental or supranational institutions to promote research or to promote scientific or artistic education or further education. The same applies to scholarships granted for the purposes specified in sentence 1 by an institution established or managed by a public corporation or by a corporation, association of persons or assets within the meaning of § 5 paragraph 1 number 9 of the Corporation Tax Act. The condition for tax exemption is that

a) the scholarships do not exceed an amount necessary for the fulfillment of the research task or for covering living expenses and meeting educational needs, and are awarded according to the guidelines issued by the donor,

b) the recipient is not required to provide a specific scientific or artistic consideration or to perform specific employee activities in connection with the scholarship;"

Income Tax Act § 3 as of 22.12.2009

You can offset the expenses of the doctorate. If the scholarship should be tax-free, the expenses will first be reduced by the tax-free income.

I hope that this information gives you an initial overview of the situation and remain

Yours sincerely

Michael Herrmann
Dipl.-Finanzwirt (FH)
Tax consultant