# Is scholarship tax free next to a salary in Germany?



## Run Guran

I am receiving a DAAD scholarship through a collaboration with a German university. The total grant amount is around 31550 Euros. At the same time, I am receiving my monthly salary from the United States.

Although a scholarship in Germany is tax-free, I am concerned because I was earning a salary at the same time. Is the scholarship tax-free in Germany in this case? Is it necessary for me to file a tax return in Germany and pay the 3555 Euro tax there, as my wage is taxed in the United States, and then apply for "Foreign Earned Income Exclusion" in the United States? Or do I simply have to file my tax clearance in the United States?


----------



## Harry Moles

Depends if you want to do things correctly and legally, or not.

If you aren't concerned with following the law, you don't file a German tax return, since your DAAD funding is tax-free. You file a US return for your US income only and use the FEIE to wipe out any taxes owing. Should be simple enough. If you keep your mouth shut about your US salary, the German authorities won't know a thing.

If you try to file a German tax return to pay tax on your US income, you may run into other complications. Does your DAAD funding allow you to work on the side? Many fellowships do not. Does your German residence permit allow you to work? Students are typically restricted to 120 full days or 240 half days per year.


----------



## Run Guran

Thank you for the detailed respons. This is a research collaboration between two universities. The Gearman university runs a program funded by DAAD, so besically they fund outgoing and incoming researchs for collaborations. The fund they provide is to cover travel and living expenses. The purpos is to work in the lab with colleagues. Nobody said anything that I can't work. Do US and Germany share tax informatio? If I do not declare tax in Germany can I receive some unexpected letters from them at a later time?


----------



## ALKB

Run Guran said:


> Thank you for the detailed respons. This is a research collaboration between two universities. The Gearman university runs a program funded by DAAD, so besically they fund outgoing and incoming researchs for collaborations. The fund they provide is to cover travel and living expenses. The purpos is to work in the lab with colleagues. Nobody said anything that I can't work. Do US and Germany share tax informatio? If I do not declare tax in Germany can I receive some unexpected letters from them at a later time?


Your visa/residence permit should state under 'Anmerkungen/Remarks' something like "Gültig zum Studium an Uni XYZ, Erwerbstätigkeit gestattet gem. § 16...

What does it state? Did your university not advise you regarding amount of work permitted?









Visa for studying


Studying in Germany – Find out which criteria you need to meet to be eligible for a visa for studying in Germany, on the Federal Government's portal.




www.make-it-in-germany.com


----------



## Harry Moles

Just a guess, but I'd imagine that the DAAD wouldn't be thrilled if someone it provided a grant to was also working full-time at a remote job.


----------



## ALKB

Harry Moles said:


> Just a guess, but I'd imagine that the DAAD wouldn't be thrilled if someone it provided a grant to was also working full-time at a remote job.


I imagine this kind of information would be in both the paperwork for the scholarship as well as in the paperwork OP must have received from the German uni.

Knowing which subsection of law the permit is based on would help, too.


----------



## ALKB

Run Guran said:


> Nobody said anything that I can't work.


Did you ever ask the question?


----------



## Harry Moles

Nobody said I anything that I can't set fire to buildings, would not be a good strategy in court.

Additional complication, the US may well regard the fellowship as taxable income, since it covers living expenses not tuition.

So basically two options for the OP: (1) do some research, figure out what is and is not allowed, and follow the rules; (2) keep very quiet about working and hope that nobody discovers what you're up to, file a US tax return for the employment income only, file nothing in Germany as this is not required for a tax-free fellowship, and generally take advantage of the fact that tax information is not shared between countries.


----------

