Syddansk Universitet PhD.- scholarship – studying abroad Fredag den 29. februar 2008 Lene Bøgetoft Hansen, Skattecenter Odense

Syddansk Universitet

PhD.- scholarship – studying abroad

Fredag den 29. februar 2008

Lene Bøgetoft Hansen, Skattecenter Odense

Side 2


Ph.d. - Scholarships – staying abroad

tirsdag 1. april 2008

Information

SKAT

Telephone no.: 72 22 18 18

Web side: www.skat.dk

Contents among other things:

”Tast Selv Borger” – and your ”skattemappe”, in which you can:

- change your provisional tax assessment

- report your tax return

- look at your wage slips

- look at your yearly statement

- calculate your taxes

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Program

Conditions of employment

• Conditions of employment/funding

• Institutions abroad

• Grant

TAX

• Tax liability

• Agreements for the avoidance of double taxation

• Tax rebate – ligningslovens § 33A

• Grants

• Allowances

• Pamphlets

• Questions

• Binding Answers

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Employment / Funding

Employment

Funding

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Conditions of employment/funding

4+4 system

• SU – until you graduate as a candidate

• Salary for tasks 280 hours in the SU financed period

• Hereafter appointment as paid PhD.- scholar at the education institution

5+3 system

• Appointment as paid PhD. - scholar at the education institution

Vocational - PhD

• Appointment at a company including expected stay at the education institution about half the time

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Institutions abroad

2 possibilities

Enrolled at an institution abroad through the whole PhD education - The salary is fixed under the premises that the salary is tax free in Denmark (Ligningslovens § 33A)

Anyone else - until 12 months abroad

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Grants

For instance:

• Grants from the education institution for travelling, insurance and board and lodging, travelling and insurance covered by bill

• board and lodging covered by max standard rates i.e. For instance establishment grants and monthly grants

• Grants from your company for travelling, insurance and board and lodging

• Travelling and insurance covered by bill

• Lodging covered by bill – maybe maximized

• Board by standard rates - tax free allowance

• Lodging by standard rates – tax free allowance

• Foundation grants

• with the proviso that the grant is used for studying abroad

• with no proviso of studying abroad,

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SKAT SKAT SKAT SKAT SKAT

SKAT

SKAT

SKAT

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Full tax liability – while staying abroad

Includes among others:

• Persons, who has disposal of a home in Denmark – i.e. a room, an apartment or a house In connection with tax liability ”home in Denmark” is considered kept unless there has been given notice to quit the home, or the home is sold or the home is hired out with security of tenure for at least 3 years.

• Danish citizens, sent abroad by the Danish State or local authorities including spouse and children under 18 years, if they are Danish citizens

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.... Full tax liability – while staying abroad

Results in:

• Taxation of the global income, that means all income is taxable in Denmark whether the income comes from Denmark or from abroad

PhD.- scholarships – who?:

• Everybody – who keeps a home in Denmark while abroad - whether they are Danish citizens or not.

• Every Danish citizen, who is appointed by public institutions

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Limited tax liability

Includes among others:

• Persons, who have income from Danish sources (as mentioned in Kildeskatteloves § 2) For instance: Salary for work carried out in Denmark, SU (study grant from the state education fund), grants for PhD. – scholarships travelling expenses, grants for students according to ”universitetsloven”, grants for foreign students, grants from ”Forskningsstyrelsen” etc

PhD. scholarships - who:

Among others:

• Everybody, who receives SU, even though they have given up their home in Denmark when moving abroad

• Everybody, who receives taxable grants from ”Forskningsstyrelsen”, even though they have given up their home in Denmark when moving abroad

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Agreements for the avoidance of double taxation

When taxable in more than one country

• Double taxation is normally solved through agreements for the avoidance of double taxation

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…. Agreements for the avoidance of double taxation

PhD. - scholarships

• Denmark is normally entitled to tax salaries from public institutions

• Denmark is normally entitled to tax SU

• The right to tax salary from private companies will depend on the period of staying abroad and if there is a home kept in Denmark while staying abroad

• If there is no home kept in Denmark, Denmark is not entitled to tax salaries from private companies

• If a home is kept in Denmark and the study state is entitled to tax the income, Denmark must reduce the Danish taxes. A special tax return concerning foreign income must be filled in an returned to SKAT together with documentation for the paid foreign taxes.

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Ligningslovens § 33A – reduction in tax - SU

Ph.d.- scholarships - SU

Not covered by Ligningslovens § 33A

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Ligningslovens § 33A – reduction in tax – public servants

PhD.- scholarships – appointed by public institutions

Conditions:

• Enrolled at an institution abroad through the whole PhD education

• Liable to full tax in Denmark

• Staying abroad for at least 6 months

• Stays in Denmark on holyday or the like must not exceed 42 days (including days of arrival and days of departure) within any period of 6 months. Holydays in Denmark at the end of the period abroad can not be included in in the 6 months period.

• The Scholar must not receive tax free travelling allowances according to ligningslovens § 7 nr. 15 or 9A

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…Ligningslovens § 33A – reduction in tax - public servants

Reduction calculation:

• Reduction is given with the proportional amount of Danish tax, which concerns the salary earned abroad

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Ligningslovens § 33A – reduction in tax - private employees

Ph.d.- scholarships – appointed by private companies

Conditions:

• Liable to full tax in Denmark

• Staying abroad for at least 6 months

• Stays in Denmark on holyday or the like must not exceed 42 days (including days of arrival and days of departure) within any period of 6 months. Holydays in Denmark at the end of the period abroad can not be included in in the 6 months period.

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... Ligningslovens § 33A – reduction in tax – private employees

Reduction calculation:

• Reduction is given with the proportional amount of Danish tax, which concerns the salary earned abroad

• If Denmark is entitled to tax the income according to an agreement forthe avoidance of double taxation – reduction is given with only half the proportional amount of Danish tax, which concerns the salary earnedabroad. Normally Denmark is entitled to tax the income, when the stay in the study state does not exceed 183 days within a 12 month’s period, 183 dayswithin a calendar year or the like (one must check the relevant agreement).

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Usefull information – ligningslovens § 33A – public servants

PhD. scholarships – enrolled at an institution abroad for the whole PhD. education – conditions according to ligningslovens § 33A are fulfilled

Exemption for tax deduction can be issued:

• on the basis of:

• Contract of employment, from which it appears:

• that you are covered by and paid according to the agreement concerning PhD. scholarships, who are enrolled at an institution abroad for the whole PhD. education

• which institution abroad you are enrolled

• the period of staying abroad

plus

• statement from the Danish institution, that the institution do not pay tax free allowances according to ligningslovens § 7 nr. 15 or 9A

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…. Usefull information - ligningslovens § 33A – public servant

Application:

• Local tax centre

Tax return:

• A special tax return concerning foreign income must be filled in

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Usefull information – ligningslovens § 33A – private employees

PhD – scholarships – appointed by private companies – the conditions in Ligningslovens § 33A is fulfilled

Denmark is entitled to tax

Your tax card can be changed for the purpose of paying ½ tax

Change can carried out on the basis of:• statement from employer telling period of working abroad and name of working country• filled in form concerning provisional tax – you can find the form here http://www.skat.dk/getFile.aspx?Id=26739

Application: • Local tax centre

Tax return:• A special tax return concerning foreign income must be filled in

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…Usefull information - ligningslovens § 33A – private employees

The study state is entitled to tax

Exemption for tax deduction can be issued

• on the basis of:

• statement from employer telling period of working abroad and name of working country

• Concerning following countries it is however a condition for getting exemption in advance that there is proof for taxation in the study state

Azerbadjan,Belgien, Bulgarien, Canada, Cypern, Den Tjekkiske Republik, Det Forende Kongerige, Estland,Finland, Frankrig, Grækenland, Irland, Island,Italien, Letland,Litauen, Luxembourg, Malta, Nederlandene, Norge, Polen, Portugal, Rumænien, Slovakiet, Slovenien, Spanien, Sverige, Tyskland Ungarn, USA og Østrig

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Foundation grants (ligningslovens § 7K)

Foundation grants is exempted from tax, if the grant is given with the proviso that the grant is used for studying abroad and is used for covering:

• Documented travelling expenses between Denmark and the study country If travelling in your own car or motorbike the rates for deduction for travelling between home an working place can be used. (for 2008 the rates are 0 kr. for the first 24 km., 1,83 kr. for the next 76 km. and 0,92 kr. for every other km.

• Usual expenses for board and lodging and miner necessaries at the studying place. Calculated either as the documented actual expense or calculated by standard rates. For 2008 the rates are 440 kr. a day for board (limited to 12 months at the same place) and 189 kr. a day for lodging.

• Payment for classes, participation fees and the like, including courses in the language of the study state.

NOTE – It is only the PhD. Scholars expenses which are covered by the tax exemption even though the foundation by setting the amount of the grant has taking into consideration that for instance wife and kids are joining the scholar at the study place. The Scholar will be liable to tax of the part of the grant, which exceeds above mentioned expenses.

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Deduction for board and lodging

Ph.d.-scolarships - SU

No deductions

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…. Deduction for board and lodging

Ph.d.- scholarships – home not kept in Denmark while abroad

No deduction for board and lodging

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… Fradrag for kost og logi

PhD.- scholarships – home kept in Denmark while abroad

Conditions for deduction for board and lodging:

• you have a home available in Denmark while abroad. The home is not considered available, if

• the home is hired out

• the home is lend to somebody

• You must be sent abroad by your Danish employer

• The stay abroad has to be temporary

• The distance between your home in Denmark and your working place abroad must be so long that you can not possibly spend the night at your home in Denmark

• You must yourselves pay for the expenses for board and lodging

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…. Deduction for board and lodging

The deduction is:

1. The documented actual expenses for board and lodging or

2. Standard rates according to ligningslovens § 9AFor 2008 the rates are 440 kr. a day for board (limited to 12 months at the same place) and 189 kr. a day for lodging.

The deduction must be reduced with:

1. Tax free allowances covering board and lodging

2. Tax free study travelling grants covering board and lodging

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Ph.d. Scholarships – from foreign contries

There might be special rules

• exemption from tax concerning scholars from developing countries

• special conditions according to agreements for the avoidance of double taxation

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Pamphlets

Hvis du skal studere i udlandet – en tjekliste Contains among other things information about TAX, SU, Health Insurance, Folkeregister, PhD., and various links.http://www.skat.dk/Vejledninger/Personserien/Pnr_56_ver1.pdf

Skatten – når du flytter til udlandetContains information about tax liability, social security, agreements for the avoidance of double taxation

http://www.skat.dk/SKAT.aspx?oId=119277&vId=200883

Skatten – ved arbejde i udlandetContains among other things information about allowances, tax exemptions and tax deduction.

http://www.skat.dk/SKAT.aspx?oId=119277&vId=200883

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Questions

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Binding answers

If you have doubts about the fiscal consequences for a given disposition you have the possibility to ask SKAT for a binding answer.

• The fee for a binding answer is 300 D.kr. each disposition.

• You can ask for a binding answer through our website www.skat.dk

• The guidance for binding answers is available here http://www.skat.dk/SKAT.aspx?oID=359960&chk=201511#pos

Documents

Syddansk Universitet PhD.- scholarship – studying abroad Fredag den 29. februar 2008 Lene Bøgetoft Hansen, Skattecenter Odense