Mobility Allowance taxedHi...

 Hi Stefano,

I am in Magdeburg, Germany and I have the same situation as you do there. Mobility Allowance is taxed. You just mentioned about the document from the tax office that states that according to the German law the Mobility Allowance should not be taxed. Can you please send the link or document to me as well ? Thanks

Best,

Mahsa

Hi Stefano,

I am PostDoc in Newcastle-under-Lyme, UK and my mobility allowance and all other extra payments are taxed as well..

Best,

Eva

Dear Stefano, 

I am a PhD at Charité Universitätsmedizin Berlin. My situation is same as yours. Unfortunately we cannot escape from taxes here as they write down a contract under these conditions. I am also interested about having this document you mention about Mobility Tax exoneration.

Bests,

Sergio 

Hi Stefano,

Thank you very much for your email. I've been told by people outside of my university that the mobility shouldn't be taxed but no luck with my institution to change that.

Could you please send me the document you are referring to from the tax office that states that according to the German law the Mobility Allowance should not be taxed? I will investigate this further from my end and let you know what I can find out. There is an office at my university that specifically handles EU projects, so I'd very much like to take this to them.

Thanks in advance!

Cheers,

Chance

Hi Stefano,

German tax law is quite extensive and the individual official in a tax office can easily arrive at a decision that is completely opposite to another one somewhere else in Germany. My limited experience of other mistakes in the handling of my own relatively simple annual tax declaration is that the tax payer has to defend themselves by pointing out where the handling of these issues by the tax office is wrong. 

I am Chair of the German Chapter of the MCAA since January and we are preparing a position on these tax and pension issues. We are organizing a career seminar in June and are looking for a speaker who can advise the Chapter members on exactly this topic. It may be best to pay for a tax advisor specializing in how German tax law deals with mobility issues.

All the Best,

Brian

Hi Stefano,

Thank you very much for your email. I've been told by people outside of my university that the mobility shouldn't be taxed but no luck with my institution to change that.

Could you please send me the document you are referring to from the tax office that states that according to the German law the Mobility Allowance should not be taxed? I will investigate this further from my end and let you know what I can find out. There is an office at my university that specifically handles EU projects, so I'd very much like to take this to them.

Thanks in advance!

Cheers,

Chance

Hi Stefano,

I am a PhD at FU Berlin and Amplitude Technologies France. My situation is the same. Everything I received is taxed. I think my salary is much lower than average ITN salary. I complained but no improvements so far.

Regards,

Achut

Hi Stefano,

I am Chair of the German Chapter of the MCAA since January and we are preparing a position on these tax and pension issues. We are organizing a career seminar in June and are looking for a speaker who can advise the Chapter members on exactly this topic. It may be best to pay for a tax advisor specializing in how German tax law deals with mobility issues.

German tax law is quite extensive and an individual official in a tax office can easily arrive at a decision that is completely opposite to another one somewhere else in Germany. My limited experience of mistakes in the handling of my own relatively simple annual tax declaration is that the tax payer has to defend themselves by pointing out where the tax office is wrong.

The document from Dresden is at: https://drive.google.com/file/d/0B_GMxUl6PbwJZnY3bE5rVjFzcjA/view

All the Best,

Brian

Hi,

I am Sara from Darmstadt. We asked information about this (also during the review meeting with EU members) because we have the same problem.

The officila answer is that the Mobility Allowance is tax free. The problem seems to be what taxes are in Germany.

The answer seems to be the following:

In Germany taxes are only those that go directly to the government; social insurance, health insurance and so on, are not to be considered as taxes because they go to special insurance companies, but as "taxes"!.

For this reason, the company or the university where you work is allowed to use that monay to pay its part of "taxes" (social, health insurance etc).

In our case, we have two different gros salaries: the first is that from the scolarship (salary + mobility allowance) and the second is our official gros ( the first subtracted the social-health insurances that the company should pay as employer).

Hope this help. No other information so far about his.

Regards,

Sara

Dear Stefano

'. So, how it is possible that in the same country someone has the Mobility Allowance tax free and someone don’t? ' - this is clearly

illegal. Either the people in Dresden are wrong or the one in Düsseldorf. The tax office (of your town / state) has some (small) flexibility in the different german

states but for sure not at this level. If you can not find an agreement with your University you should first try to directly contact you local tax office (Finanzamt in

Germany) - and raise this question. Second you can go to a 'Steuerberater'. The last one will charge you a bit money for consulting but should be able to provide enough advice for the further steps.

WIth respect to your other issue (traveling) my contract clearly says: Category 3 (training expanses)
Contribution to the training expenses of eligible researchers and research/transfer of knowledge
programme expenses: Flat rate of EUR 800 per researcher-month managed by the host
organisation to contribute for expenses related to the participation of eligible researchers to
training activities and expenses related to research costs.

From this sentence I would say that if you external stay is basically a kind of training it can be covered by this budget.

Hi Stefano,

I'm Italian like you and I've just completed a postdoctoral Marie Curie in Konstanz (so keep in mind that there might be differences between PhD students and postdocs).

I can confirm what Sara said. So, what happened to me during my Marie Curie is that the university would take a part from the total written in my contract (salary+mobility allowance), what was left was then considered my salary and taxed according to German laws (tax itself, insurance and so on). I agree with the general interpretation that an allowance, not being a salary but some sort of "help" to you moving to a different country, should not be taxed as, instead, is common in Germany. Further, I really still don't understand why the university takes some money for its part of taxes and then I still have to pay taxes (and on the total). At some point, someone told me that we sort of "come for free" as the Marie Curie money are used to pay both the employer's and the empoyee's taxes. I cannot complain about the final net salary but I have to say that at the end you end up having more or less the same salary as any other postdoc (which is quite ironical as everyone else assumes you're rich just because you get a Marie Curie).

On the money for travel, I agree with Frank-Michael that if it's a research trip, it should be paid with research money. I have heard of another case where the interpretation from the PI was that research stays should be paid from one's pocket but I think that this is interpretation is wrong as travel for research are not made for personal reasons and, therefore, should be paid from research money (it might often be the case that one has to keep paying rent in the country were the PI's lab is). In general terms, I believe that the PI has, currently, too much power due to his/her "supervisory" role and this power can, obviously, be misused.

Best,

Carmelo

Hi all,

as an experienced German tax native who heard from this problem formerly, I can add the following (I don't know the legel German expressions exactly, I will provide them if I find out): The problem is neither federal state law (since tax law is national law) nor the social insurance system. The crucial point is whether the mobility allowance is declared as salary or as allowance. The calculation of taxes and social insurance costs is based on the salary, whereas allowance are job-related necessary expenses that you are reimbursed for and that are tax free (because it's reimbursement and not additional money). Usually, you need bills and receipts to prove that an allowance is an allowance and not a covered tax-free salary. As far as I got in Marie Curie issues, most universities prefer to declare the mobility allowance as salary, because it would be additional work and probably needs bills and receipts to declare the mobility allowance as an allowance as it is defined by the German tax law.

Take care!

Sara

I'm on a MC IEF postdoc and here in Heidelberg my institute pays its 'taxes' out of the money from the EU, and my allowances are all declared as salary, so I actually get the same as a normal postdoc (like Mahsa and Carmelo).  I also don't get to join the private pension scheme, so actually taking a MC fellowship has been a salary cut compared to a normal UK postdoc.

What I can say is that it's often worth negotiating with your boss on this; mine had no idea what would happen to my salary, and when he found out he was very helpful in trying to secure additional funding to make up any shortfalls.

Another option to increase your salary is to try to get private health insurance; especially for young MC fellows without families this can be significantly cheaper than the German state health insurance, and this is a double saving (as both the employee and employer contributions come from your MC money).  This is a relatively complex topic (there is a minimum salary requirement for entering private health insurance), and has long term implications if you stay in Germany (it's difficult to return to a public insurance system once you've gone private), but it's worth investigating further - it saved me quite a bit.

Hope that helps!

Ed

Hi everyone,

I am doing the PhD in Germany as well (Tübingen) and I am in the same situation as you. I have for a contract that all my salary must be taxed, so I am also earning less than what I am supposed to earn for having a Marie-Curie fellowship.

But also, I have a interesting situation here on my own. I am part of a ITN MC project and one of my partners is doing the PhD in Stuttgart (ca. 40km form Tübingen), meaning that we both live not only in the same country, but also in the same region (Baden-Württemberg). She has the same position as mine ( PhD in Fraunhofer Institute) but she is earning in brutto more than me. I am working in a small private company in Tübingen but I am also enrolled at the University (PhD paperwork, etc...) and I remember that at the beginning of my stay here, they told me (in the company) that they were going to retain a little bit of my salary for taxes and at the end of my PhD, if there was something left, they were going to give it back to me. The problem came when I saw the contract and saw that my salary was as well taxed! So I didn´t understand then why they are retaining part of my salary for taxes when I am paying taxes myself!!

I asked, but they couldn´t give me an understandable explanation for me. Does anyone know what explanation might be?

My college does not have this problem and she is earning what is supposed to earn a Marie-Curie PhD student... I am a lost here guys, so appreciate every comments you have!

Thanks to all,

Cheers,

C

Dear all,

Thanks for your replies. I understand that we are almost all in the same situation.

The document from Dresden is the one shared by Brian. It's quite old, but I asked to the University in Dresden if the situation is the same now and this is what they replied: "aufgrund der damals gegebenen Auskunft des Finanzamtes zur Steuerfreiheit des Mobilitätszuschusses (Auskunft ist drei Jahre gültig) wird an der TU Dresden weiterhin von der Steuerfreiheit des Mobilitätszuschusses ausgegangen. Diesbezüglich gab es bisher auch vonseiten der Steuerprüfung keine Beanstandungen.". I leave to you the translation, because I'm new with German, but it seams that they confirm that the Mobility Allowance is still not taxed.

It'd be interesting to present this document to the offices specific for the EU project, as it's the case of Chance, pointing out that for the EU the Mobility Allowance is supposed to be tax free.

I agree with Brian: it looks that the tax payer want to be sure to don’t do anything wrong. They have not provided to me many explanations: they simply say that according to the German law the Mobility Allowance should be taxed.

Thank you Sara: I think this may explain something about my payslip.

Carmelo, this i exactly my situation: my surpevisor treats me as if I were privileged. The problem is that he don’t want to understand that with taxes and all the expenses I have because I’m abroad, I’m not really earning much more than a normal PhD student. For example now I’m in Birmingham for my research and I have to pay really a lot for my room (the euro/pound exchange is falling down quickly lately), but I have no way to ask some refund for this.

It’d be useful to know about the few positive experience, as in Dresden or as your colleague Clàudia. It may be that, if we join forces, we could find a common solution to the problem.

Cheers,

Stefano

Yes, half of the health insurance, that should pay the university is taken from our gross salary, as said before. (3519,19€/Monat: Dieser Betrag entspricht der Haushaltsbelastung für die Einstellung des EU-Forscher und entspricht nach Abzug der Arbeitgeberanteile zur Sozialversicherung dem Bruttogehalt für die Tätigkeit...)
 

Concerning taxes, everyone should look at the following:

"doppelbesteuerungsabkommen Deutschland - TheCountryYouLivedBefore". There should be an equivalent document in your own language ("double taxation convention" in english, "convenio de doble imposición" in spanish, ...)

For example, the one with Spain:

http://steuern-spanien.com/wp-content/uploads/2012/04/doppelbesteuerungsabkommen-brd-spanien.pdf

article 19.2 says that if you are phd student, and lived before in Spain, Germany can not tax any of your incomes (you have to fight to convince them about this) as the money comes from outside Germany (i.e. from the EU). you just pay the insurances (AV,KV, SV). This depends on the treaty with each particular country. For germany-france, sth equivalent is e.g. in article 17.

Dear Brian, yes, I think that's exaxtly the point. The problem is that the tax office doesn't matter where the money comes (from Germany or from EU).

And this is why it may be interesting the document introduced by Fernando. I tried to show this document to the tax office, but they said again that it was not applicable. Do you know if someone in our position has menaged to obtain the exemption?

Thanks,

Stefano

I obtained the exemption. It was given by the Finanzamt Dresden. It took me quite a lot to find the person who understood what a double tax convention is. Then this person responsible for this issues asked me to provide a lot of documents, and as I fulfilled all the requirements, it was given. The 180 days limit applies only for some countries (treaties), in my case it did not apply (I was 3 years of an ITN). Important was that I lived before in another country, that then I did not have any house back in that country, and that the contract said explicitly that the sources of the salary did not come from Germany: "Für die Tätigkeit wir ein monatlicher Betrag von 3519,19€ von der Research Executive Agency zur Verfügung gestellt (...) und ausschließlich mit Mitteln der Marie Curie Maßnahme Initial Training Networks - ITN im FP7 (...) der Europäischen Union (...) EU-Finanzhilfevereinbarung (...)".

Depending on your institution or contract, it may be different. But the Finanzamt tries at the beginning to say it is not possible, you have to defend your own rights by yourself. It took me one year to obtain it. Before the exemption, my salary was 1800€, after it, 2200€ per month (you still have to pay the insurances and so on).

I also know another ITN fellow that got the same exemptio in France.

Hi Claudia,

As I understand it the case is as follows:  Say your Fellowship came with 12 euros, which is sent to your employer, who then have to calculate your salary.

As you know, you have to pay social security contributions (~20%) and income tax (~30%).  Your employer also has to pay 20% of your salary as an employers contribution to social security.  As Sara made clear above, social security payments aren't strictly 'tax'.  

So your employer will pay 10 euros, as they must contribute 2 euros to your social security.  Of your 10 euros, you pay 3 euros as tax and 2 euros as your social security contribution, leaving you 5.  As Sara made clear above, social security payments aren't strictly 'tax', and this is what happens to almost all MC Fellows.  

The issue that many Fellows face is that the mobility allowance paid on fellowships is - arguably - not subject to tax (see Sara and Brian's comments above)

oops

Dear Fernando,

Thank you very much for your information. The convention for Italy apparently doesn't have this 180 days limit, but it's only valid for the first two years.

Stefano

Dear all,

if you could take the time to fill out the poll on the website (https://www.mariecuriealumni.eu/groups/german-chapter?qt-commons_bw=commons_polls) that would help Brian in preparing a position for the MCAA before the summer meeting.

Best,

Ed

Hi all,

If you recall Brian posted the document from the Dresden tax office (see post on March 12th, 2015) showing that in at least one case a MC fellow had not had to pay tax on their mobility allowance.  I submitted the same document to my tax office (Heidelberg) and 6 weeks later still haven't had a reply.  I also presented it to the admin department here, who refused to accept that it had been used by a MC fellow and stated that it was entirely irrelvant.

The results from the poll show that all MC fellows are (unfortunately) paying tax on their mobility allowances, and so I'd agree with Brian's post (see the discussion in the Career Choices Seminar thread) that the best way to proceed is to 1) try to establish a unified position, and put pressure on the European Commission's NCP officers (Brian has done some of this, but together we can do more) and 2) try to reclaim as much tax as possible for moving expenditures - which requires keeping receipts!

Best,

Ed

Hi, have there been any updates about mobility taxation in Germany since last year? I will be doing my taxes in Germany for the first time next month, and I just wanted to know if there are any new documents that I could submit with my filing to get any of the mobility tax back? Thanks, Katryna

Hi

I am also a PhD in Dusseldorf and my allowance is being taxed. I was transferred within the EU Project from Scotland, where this was obviously not taxed. My question is: can I somehow be reimbursed for that? Following Katryna question: any updates on the legal aspects? Should the allowance be taxed or not?

Thanks for the reply, Anna

Dear all,

I was a former ESR in Germany and also my mobility allowance was taxed nevertheless, I always did the yearly tax declaration and at least got some money back. You should submit your forms before end May.

I am giving you the names of the forms that I always filled and submit to Finanzamt personally. You can download these files online. Here is the forms for tax declaration of year 2015:

est-15-anlage-n

est-15-1v

Do not forget to bring the copies of the invoices of your expenses such as: (pharmacy/ medical costs, costs for transport to your work, working material, computer (you can claim a new computer cost for 3 years), internet (assuming that you use your internet connection also for work), residence permit and passport costs, yearly bank account cost...).

I hope it helps.

Best regards,

Zeynep