Aarhus University. Ph.d. scholarship studying abroad. Autumn 2014 SKAT, Virksomhedsvejledning, Aarhus

Transcription

1 Aarhus University Ph.d. scholarship studying abroad Autumn 2014 SKAT, Virksomhedsvejledning, Aarhus

2 Programme - topics Tax liability Agreements to avoid double taxation Grants Deductions/allowances Additional information Any questions. Side 2

3 Ph.d.-scholars abroad This presentation is for Ph.d.-scholars (postgraduates) who as part of their graduation from Aarhus University spend a short stay abroad during their Ph.d.-studies. If the Ph.d. is enrolled at an institution abroad through the entire education as Ph.d then the salary is fixed under different premises you have to ask SKAT specifically. Side 3

4 Full tax liability while staying abroad Full tax liability for: Any person who has residence in Denmark while staying abroad - for example a room, an apartment or a house (rented or owned) - is fully liable to pay tax to Denmark. Danish citizens sent abroad by the Danish State or any local authorities (including spouse and children under the age of 18, if they are Danish citizens). Side 4

5 What is residence in Denmark? Residence in Denmark is the place where you live, for example a room, an apartment, a house/villa. Residence in Denmark is considered being kept unless: there has been given notice to quit the residence, or it has been sold or it is hired out for at least three years. Side 5

6 Full tax liability while staying abroad The Danish tax system is based on the global income principle. It means that a person s total income is taxable in Denmark no matter where the income comes or emerges from (Denmark or abroad). Full tax liability concerns: Any resident in Denmark who continues to keep a residence in Denmark while staying abroad no matter whether he/she is a Danish citizen or not. Any Danish citizen who is appointed by the Danish State, local authorities or public institutions. Side 6

7 Limited tax liability Any person - not living in Denmark - but having income from Danish sources, for instance: Salary for work carried out in Denmark Danish state education grant (SU) Grants for Ph.d.-scholarship, travelling expenses, grants for students according to the Danish Act on Universities (universitetsloven), grants for foreign students, grants from Forskningsstyrelsen etc. For Ph.d. scholars this means: Any Ph.d. who receives SU, even though he/she has given up residence in Denmark when moving abroad Any Ph.d. who receives taxable grants from Forskningsstyrelsen, even though he/she has given up residence in Denmark when moving abroad. Side 7

8 Agreements to avoid double taxation When an income is taxable in more than one country, there is a situation of double taxation. Double taxation is normally solved through agreements to avoid double taxation. These are bilateral agreements concluded between two countries in order to avoid double tax on the same income. Side 8

9 Agreements to avoid double taxation Denmark is generally entitled to tax salaries from public institutions - also SU. The right to tax salary from private companies depends on the duration of the stay abroad, and whether or not the residence in Denmark is maintained while staying abroad: If the residence in Denmark is not kept, Denmark is not entitled to tax salaries from private companies If the residence in Denmark is kept and the country where the studies are carried out is entitled to tax the income, Denmark reduces the Danish tax to be paid. A special tax return concerning foreign income must be filled in and returned to SKAT together with documentation of the foreign taxes paid (form E). Side 9

10 Grants All grants are subject to tax in Denmark: Grants from the education institution for travelling, insurance, food and accommodation no matter whether covered by bill or not Grants from a (or your) company for travelling, insurance, food and accommodation no matter whether covered by bill or not SU Foundation grants (LL 7K) except: Under the condition that the grant is used exclusively for studying abroad Under the condition that the study actually takes place abroad. Side 10

11 Foundation grants (LL 7K) Foundation grants are exempted from tax if the grant is given under the condition that it is used for studying abroad, and if it is used for covering These kinds of expenses are used for studying abroad : Documented travelling expenses between Denmark and the country where you are studying. If you use your own car or motorbike for travelling, you may use the deduction for transport between home and work. (In 2014 the rates are DKK 0 for the first 24 km; DKK 2.10 for the next 98 km, and DKK 1.05 for the rest of the distance). Usual expenses for food and accommodation and minor necessities at the place of study. Calculated either on the basis of documented actual expenses or calculated by standard rates. For 2014 the rates are DKK 464 per day for food (limited to 12 months at the same place) and DKK 199 per day for accommodation. Payment for classes, participation fees, etc. including courses in the language of the country where you are studying. Books. Side 11

12 Foundation grants (LL 7K) Important! Only the Ph.d.-scholars expenses are covered by the tax exemption even though the foundation by setting the amount of the grant has taken into consideration that the wife and children are joining the scholar in the country where he/she is studying. The scholar will be liable to tax on the part of the grant that exceeds the above-mentioned expenses. Side 12

13 Foundation grants (LL 7K) These grants can be used for: Accommodation Airfares - departure and return Transport to and from the place of study Expenses for educational purposes all fees, courses etc. and books for study use Travel insurance only for yourself Visa - for you only Household effects procurement of missing inventory and necessary belongings. Side 13

14 Foundation grants (LL 7K) These grants can not be used for for example: Local transport Buying a car Private health insurance Leisure activities. Side 14

15 Deduction of food and accommodation expenses Main rule: No permanent resident in Denmark can deduct expenses for food and accomodation while staying in Denmark. Exception: When travelling for an employer. Side 15

16 Deduction of food and accommodation expenses For Ph.d.-scholars with no residence in Denmark while staying abroad, there is no deduction for food and accommodation! For Ph.d.-scholars with a residence in Denmark while staying abroad there are some deductions of food and accomodation expenses under certain conditions. Side 16

17 Deduction of food and accommodation expenses Ph.d.-scholars with a residence in Denmark - conditions: You have an available residence in Denmark while staying abroad. The residence is not considered available, if it is hired out is lent out to somebody. You are sent abroad by your Danish employer The stay abroad is temporary The distance between your home in Denmark and your working place abroad is so far that you can not possibly spend the night at your home in Denmark. You pay for food and accommodation expenses yourself. Side 17

18 Deduction of food and accommodation expenses You can deduct maximum DKK 25,500 either on the basis of documented actual food and accommodation expenses or according to the standard rates (they are DKK 464 per day for food (limited to 12 months at the same place) and DKK 199 per a day for accommodation). The deduction will be reduced by: Any tax-free allowances covering food and accommodation Any tax-free study travelling grants covering food and accommodation. Side 18

19 Ph.d.-scholarships from foreign countries There might be special rules according to: Tax exemptions for scholars from developing countries Special conditions according to double taxation agreements. Side 19

20 Guides for more information If you need additional information please look for the leaflet: Skatten ved arbejde i udlandet It contains information about for example allowances, tax exemptions and tax deductions. Find it here: Skat.dk Jura Vejledninger til borgere Skatten ved arbejde i udlandet (P.nr. 24). Sorry it is in Danish. Side 20

21 Binding ruling For a fee of DKK 400 it is possible to obtain a legally binding ruling from SKAT on questions about taxation in Denmark. For example, you can ask SKAT whether you as an employee can get taxfree travel allowance or not. Your question must be specific and relate to your own situation you can not ask about general or political issues. Side 21

22 ???????????????????????? Any questions? Side 22