Fernanda Bajanca
Nelson R. Garcia-Polanco
Fernanda Bajanca
Taxation of mobility allowance for PhD students
Dear,
I have a question regarding mobility allowance. I am currently a PhD student within ITN/EJD program in Porto, Portugal. By the rules of my faculty, my mobility allowance is being taxed (as they see it as a part of our salary). What is your experience with this issue, is it possible to change it, so it's not heavily taxed? I heard that it's illegal to tax it, but I also think that this depends on the country.
Cheers from Porto,
Jelena
11 Comments
Dear Jelena :),
Yes, unfortunatelly, it is the case in Spain as well, due to national legislation (the same for family allowance, they are added to the salary and taxed together).
Hi Elena,
I did my PhD with a Marie Curie fellowship at the University of Oslo, and in my case I didn't pay any taxes on the mobility allowance. There were two different concepts on our payslip, on the one hand the salary, which of course was taxable, and on the other hand, the mobility allowance, which was not taxable.
So, it looks like the decision of being or not taxable depends very much on the country you are in.
Hi there, as Eduardo I am also a fellow at University of Algarve and started my contract in September. In fact I have question the Human Resources department about that issue and the awnser has been the same as posted before, that is dependent on the laws of the country, in this case Portugal. I also know for example that in italy none of it is taxable, both the living allowance as well as the mobility or family. Nonetheless, I made ask the Portuguese Financial ministry if there is any chance that both the family and mobility could be taxed under different taxation percentage and I am still waiting for their awnser. I will let you know as soon as I hear from them.
Hi Bibiana, I'm doing a MS in Italy and the mobility and family allowance are taxable in my salary. Could you give more information about the exception of taxes of mobility and family allowance in Italy? It will be very useful.
Thanks in avance.
Maria
Dear all,
Thank you for responses, now I have everything cleared out. Also I got this as an response from our project manager:
Yes, it is true the mobility allowance + salary is taxed. This is the rule for almost all EU countries (only Austria is the exception, but we are fighting to make it also taxable so that it is equal for all).
For now I am fine with the taxation and everything, but what I see as a problem is doing a secondment. By my project I should go to Austria for 9 monhts, and within this period my salary won't change (which I am fine with), but they won't cover any other expenses except the plane ticket. I think this is unfair, if we compare the salaries between us, the ESRs in Portugal and in Austria. We are now trying to change something, so the host institution can at least cover our acommodation over there. Has anybody faced this kind of issue?
Cheers from Porto,
Jelena
Hi Jelena,
At my institute (in Spain), we use the research allowance to cover additional living expenses during the secondment as they are research related costs. You could investigate this option, if you haven’t planned to use it for something else.
Catherine
Hi Jelena,
In our project secondment accommodation and living expenses were fully covered by the project funding. No one had such a long stay as secondment. For example I stayed 3 months in the US and it was everything paid, that was my secondment. But when I moved for 22 months it was not and that was my placement... So this might be kind of tricky, I guess it's important to clarify it and even negotiate it beforehand the earlier the better.
To my understanding up to 10 months projects are able to pay all your expenses in a secondment according to Marie Curie rules. But each project decides how exactly the will do it depending on their particularities.
Hope this helps.
Cheers
Hello Jelena,
I am doing my PhD in Madrid (Spain). Our project officer told us that accomodation and travel expenses should be covered for secondments for less than 6 months. For secondments for longer period I guess its tricky. But anyhow, travel expenses and accommodation for at least 6/9 months of your stay will be paid.
Cheers from Spain,
Diana.
I believe what you heard is wrong; it is in fact legal to tax it and ilegal not to tax it :)
Most Beneficiary add the mobility allowance to the salary and therefore, this must be taxed according to the normal taxation rules. In some units and some countries it has been possible to receive this mobility allowance based on your accommodation receipts in the beneficiary country (if your accommodation expenses are higher or equal to the mobility allowance money); in this case, there wouldn't be any taxes as it would be based on receipts, and you would need to bring it such receipts every month (by the way this can get complicated during secondments if you don't keep the flat in the Beneficiary country). Moreover, this procedure is quite complicated for some employers to arrange even if the taxation rules permit it.
So I am afraid that the short answer is that mobility (as well as family) allowances are taxed similarly as the living allowances unless you can find a way with your employer to pay you the mobility allowance based on actual bills related to living in the Beneficiary country (e.g., accommodation and electricity bills on your name are eligible, but food tickets for example are not eligible as bills, unless they are paid by a card on your name and can be proved that those costs belong to you)
I think the answer to this issue depends on many factors, for example, the country, the tax rules for different regions or cityies in the same country, the special rules for researchers, even the host admistration or HR team' internal regulations. As far as I know, in KU Leuven of Belgium, these 2 allowances are not taxed, and paid seperately with monthly salary.
I also heard that in UK, MC fellows try to recieve these allowance by reimbursment their rent, to avoid tax.
Hi Elena,
I'm a Marie Curie Fellow at the University of Algarve. As it has happened to you, my mobility allowance is included in my salary. I think that it is the rule in Portugal. I have been contracted as an Invited Auxiliary Researcher.
Best regards,
Eduardo