Fan Mo
Fernanda Bajanca
Quentin Loisel
Tax exemption for MC Fellows? ...
Double taxation agreements I would like to open a discussion thread about double taxation. Many countries have signed Treaties for the Avoidance of Double Taxation. Some of these contain articles which allow for researchers to be exempt from taxes in their host country for two years... (Please read on) I cite as an example article 19.1 from the UK/Germany treaty (http://ow.ly/ajCk3045mcY): " An individual who visits a Contracting State for a period not exceeding two years for the purpose of teaching or engaging in research at a university, college, school, museum or other cul- tural or educational institution of that State or under an official programme of cultural exchange and who is, or was immediate- ly before that visit, a resident of the other Contracting State shall be exempt from tax in the first-mentioned State on his remu - neration for such activity, provided that such remuneration is derived by him from outside that State." For UK/Italy it is http://ow.ly/JkdH3045mfw (articles 20-21). Does anyone have any experience with such tax exemptions? For a list of UK tax treaties see here. Obviously we are talking about legal options, nothing illegal. Best, Stefan Disclaimer: Obviously MCAA does not give any legal advice on this, but it would be nice to hear people's experiences!
3 Comments
Hi Michael, thank you for this very helpful reply, I am sure many people will be interested to read this. Best, Stefan
Hi there!
I was wondering whether the tax exemption should appear in your work contract (the contract between the researcher and the institution)? e.g. should it say that you are going to pay taxes according to xy treaty or be more specific and say that you are going to pay taxes in a certain country? Thanks!
The double taxation agreement simply means that you can choose if your income should be taxed in your country of origin, or the country where your Fellowship is.
Before I started my UK Fellowship I sought advice from a tax consultant. In my case it turned out that I was better off being taxed in the UK rather than in my country of origin, Germany.
But there are large differences between countries, and individual circumstances also play a huge role. Coming from Germany for example, your previous income, your marital status (and spouse's income), the start and end dates of your contract, how much you paid for your relocation, even how often you visit home can make a difference. There are other factors to consider as well, e.g. insurance, pensions, or child benefits in your country of origin.
If you're not sure what is best for you, it might be worthwhile to consult a tax solicitor who has experience with such issues.