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Taxation

Research Visit Based on a Fellowship:

If your research visit to Germany is supposed to take place in the framework of a fellowship you may, under certain circumstances, be exempt from taxation under German income tax law. It is certainly worth consulting the organisation which has awarded the fellowship on this point. Furthermore, you should find out whether the fellowship paid in Germany is subject to taxation in your own country.

The preconditions for tax exemption on fellowships in Germany are:

• award from public funds or via a public or nonprofit agency (recognised under German law)
• sponsoring research or academic or artistic training or continuing education
• no higher than the amount required to fulfil the research task or to cover living and training needs
• grant according to the regulations of the donor
• no quid pro quo requirement or employment of the recipient

Research Visit Based on an Employment Contract:

If your research visit is based on an employment contract in Germany and will last more than 6 months you will effectively be liable to taxation in Germany on your globally-earned income and assets.

Income tax:

Income tax is deducted from your salary at source and paid to the state directly by your employer, i.e. the university. The amount of taxation depends on income, marital status and tax bracket. When you first start work and at the beginning of every subsequent calendar year, you will have to hand a “Lohnsteuerkarte” (tax card) in to your employer. It contains personal details that are relevant for taxation, such as whether you are married and have children. You can obtain this card from the “Einwohnermeldeamt” (Residents’ Registration Offi ce) in your place of residence. However, an electronic system is currently being developed: in future, every person registered will be issued with a life-long ID number. You will usually be sent this number by post a few days after registering at the Residents’ Registration Offi ce. During the transition period, a paper tax card will still be issued; it will probably be abolished completely in 2011 and replaced by the “Steuer-Identifikationsnummer” (tax identification number).

Double Taxation Agreements:

In order to avoid a situation in which foreigners are liable to pay tax both in Germany and in their own countries, double taxation agreements have been signed with many countries. They regulate in which country you have to pay tax.

If you stay in Germany for less than 6 months, your income will be taxed in your own country provided that you work for a foreign employer and that the double taxation agreement assigns the right of taxation to your own country. If one of these conditions is not met, your salary will be taxed in Germany. Agreements exist with some countries stating that university teachers and researchers who come to Germany for a maximum of two years to work on research at a public research institution may pay their taxes in their own countries. Details can be found in the double taxation agreements between the Member States of the EU and other countries.

In Marburg: Double taxation

You can download the application form for employees subject to unlimited tax liability from the website of the Ministry of Finance in Hessen: www.formulare-bfinv.de
(Use the form search to find the relevant application.)

If you are a member of staff and live in the Marburg municipal area you can address any questions you have about double taxation to the “Finanzamt Marburg-Biedenkopf” (local tax office).

Finanzamt Marburg-Biedenkopf
Robert-Koch-Straße 7
35037 Marburg
Tel.: 0 64 21 / 6 98-0

For further useful information, forms and leaflets on the topic of taxation and double taxation visit the website of the “Oberfinanzdirektion Frankfurt” (regional tax office):
www.oberfinanzdirektion-frankfurt.de

Insider Info: Tax Card

If you can obtain a “Lohnsteuerkarte” (tax card) from the Residents’ Registration Office, provided that you have a residence permit for at least six months. If you are going to work in Germany for a shorter period you should submit an application for “beschränkt einkommenssteuerpflichtige Arbeitnehmer” (employees subject to limited tax liability) to respective Tax Office.