Grants and scholarships

To ensure a satisfactory administration of grant payments to foreign students, guest researchers, etc.
to ensure correct reporting to the tax authorities of payments.

The head of the department or other organisational unit at AAU that wishes to pay out a grant is responsible for completing the standard form, cf. Appendices 1 to 5, and submitting it in a certified form to the payroll office.

The manager is also responsible for ensuring that the formalities are in order, cf. section 4.2. It may be possible to obtain advice from the HR department on applying for a residence and work permit, while the payroll office can assist in connection with the tax rules.

The head of department for the payroll office is responsible for ensuring that payments via SLS are made in accordance with applicable rules with a view to correct reporting to the tax authorities of grants paid.

This procedure includes cases where a payment to a foreign student, researcher, etc. can be defined as payment of a scholarship.

Payment of grants is a grey area where there must be some delimitations to reimbursement of travel costs, payment of hourly daily allowance and payment of salary (on the basis of an employment contract, and will thus run as a general employment).

Reimbursement of travel costs / hourly daily allowance ctr. Scholarships

Hourly allowance and reimbursement of travel costs can only be paid to employees at AAU, including guest lecturers. Visiting researchers cannot be paid hourly benefits. Guest lecturers can receive hourly allowances and be reimbursed for travel costs. They have a specific defined purpose for the trip here, namely to perform one or more lectures, for which they receive a fee in accordance with the rules on guest fees. Therefore, they are treated in the same way as other employees at AAU, who can receive hourly allowance and reimbursement of travel costs in accordance with the business travel circular.

Outside the mission circular, actual documented travel expenses can be paid, provided that these meet the same documentation requirements as other expenses covered by AAU (e.g. relating to activity at AAU, supplier invoice, original ticket, etc.). Rates in accordance with the Civil Service Circular are indicative of the level of reimbursement of travel expenses.

Salary CTR. Scholarship

The payment of a grant is characterised by the payment of a grant to a foreign guest who is staying in Denmark at AAU - typically for educational purposes either as part of a commenced education or acquired education in the home country - and who obtains some kind of benefit from the visit. The stay must not be of a long-term nature, so that the payment can be equated with an ongoing salary for work performed. A grant is characterised by being "a subsidy to cover accommodation expenses in this country".

Payment of salary is characterised by the payment of remuneration to a foreign lecturer/researcher/student for the performance of an activity (service) where AAU achieves a profit/benefit/solves a task, and where the use of the payment has not been arranged in advance, as is the case, for example, with a grant/grant (covering expenses for housing and teaching, etc.),  i.e. the person disposes of the use of the payment themselves.

When it comes to the payment of salary, an employment contract must be drawn up to ensure that the salary and terms of employment correspond to the terms agreed in the collective agreement. Here, normal recruitment procedures at AAU are followed. Here you should be aware of the section 48E taxation rule (more detailed on the payroll office's website under "Taxation of foreigners").

In general, it should be pointed out that whether a service is taxable is independent of any definitions/designations at AAU. Tax Centre Aalborg looks at the real/concrete content of the attachment relationship between the benefit recipient and the benefit provider.

Duty of disclosure CTR. Tax liability

• Section 1 of the Danish Act on Withholding Tax at Source (KSL): stipulates full tax liability
• Section 2 of the Act on Withholding Tax at Source (KSL): stipulates the limited tax liability.

These provisions determine when tax liability is payable to Denmark. KSL also defines A-income and B-income.

The Tax Control Act (SKL): lays down rules for, among other things, an employer's duty to provide information.
It may well be the case that a benefit is defined as B-income, but is not taxable in Denmark. This is also where double taxation rules come into the picture. An employer may have a duty to report to the tax authorities even if a benefit is not taxable for the recipient in Denmark.

4.1 Types of grants

At AAU, the area of grants includes the following payments:

• Externally funded scholarships (e.g. Oticon)
• Scholar grants for foreign students enrolled in a study programme at AAU
• Trainee scholarships (covering subsistence expence for personal necessities, food, lodging, and pocket money)
• Research Year Students
• SU stipend, 4+4

You can find the forms for payment under 'Forms'.

4.2 Formalities

The head of a department or other organisational unit at AAU is responsible for ensuring that the following formalities are in order:

application for tax exemption / tax deduction card at Tax Center Aalborg (or possibly a letter of grant from the donor, which states a general tax exemption for a given area)
residence and possibly work permit
obtains information about name, address, civil registration number and bank account number
any employment contract in connection with long-term employment relationships

The head of the payroll office is responsible for ensuring that, on the basis of registrations in SLS, correct and timely reporting is made to the tax authorities of a calendar year's payments to foreign students, guest researchers, etc.

4.3 Procedure 

The following procedure is followed when you want to pay out grants:

The standard form, cf. Appendices 1-5, must be completed, certified and sent to the payroll office, which reports the payment to the payroll system SLS. In the case of a long-term guest/employment process, the employment must be made via the HR department (ordinary employment).

Applications for tax matters must be sent to Tax Centre Aalborg (a copy is attached to the form to the payroll office). In cases where a general tax exemption has been granted in accordance with a letter of grant from the grantor and/or Tax Centre Aalborg, this is attached to the standard form.

The duration of the stay must be stated.

The payment period is specified (from the first of a month with a year to the last day of a month with a year) as well as the monthly amount paid. If you have any rules about hourly/weekly rates, they are converted to a month's salary in a given payment period. That is, if you have a weekly rate of x DKK and the person is here for 7 weeks in January and February. The payment period will be 01.01.xx – 28.02.xx and monthly salary (x*7)/2.

The method of payment is stated if the stay is less than 1 month duration (pick up the amount during the stay or transfer to a foreign bank).

A copy of any residence and work permit must be attached to the form to the payroll office.

Salary forms and their registrations in SLS constitute documentation for payment to the grant recipient.

SLS generates data material for reporting paid grants to the Danish Tax Administration on the basis of civil registration number / date of birth, etc., which has been reported to the grant recipients in question.

You can find information about residence and work permits for visiting researchers on the English HR website.

Scholarships paid in accordance with a contract with the European Commission, e.g. Marie Currie Fellow scholarships.

The scholarship is awarded to PhD fellows from EU countries who are staying in Denmark at AAU as part of their PhD scholarship. The fellow's supervisor in the home country must confirm that the stay is part of the person's PhD scholarship in the home country. That is, they have a permanent affiliation with another university in their home country. The scholarship is awarded to cover the costs of staying in Denmark and may max. 1200 EURO per month.

If the stay in Denmark does not exceed 365 days and the PhD fellow is permanently liable to income tax in the home country, the tax treatment will take place in accordance with section 8(2) of the Danish Act on Withholding Tax at Source. If the stay exceeds 365 days and the PhD candidate is continuously liable to income tax in the home country, the tax treatment for the first 365 days will normally take place in accordance with section 8(2) of the Danish Act on Withholding Tax at Source. From the 366th day, it will in any case be a taxable scholarship. For stays of less than 365 days, a certified residence form is not required as documentation of continued tax liability to the home country.

You must apply for tax exemption / tax card from Tax Center Aalborg, cf. forms and letters on the payroll office's website. The form states that the scholarship in question is "EU scholarships" and which scholarship it is, e.g. Marie Currie Fellow or "external funding for a PhD fellow in the home country". You can apply for a tax exemption / tax card for recipients of funds from a specific EU programme/project.

EU scholarships and scholarships from external funds are considered B-income. Reporting to the tax authorities will be done automatically via SLS (the payroll system), regardless of whether the amount is tax-free in Denmark or not.

A maximum of 1 year

Scholarships paid from external funds to a foreign PhD fellow who is staying in Denmark for a short period as part of the person's PhD scholarship abroad. The fellow's supervisor in the home country must confirm that the stay is part of their PhD scholarship in the home country.

If the stay in Denmark does not exceed 365 days and the PhD fellow is permanently liable to income tax in the home country, the tax treatment will take place in accordance with section 8(2) of the Danish Act on Withholding Tax at Source. If the stay exceeds 365 days and the PhD candidate is continuously liable to income tax in the home country, the tax treatment for the first 365 days will normally take place in accordance with section 8(2) of the Danish Act on Withholding Tax at Source. From the 366th day, it will in any case be a taxable scholarship. For stays of less than 365 days, a certified residence form is not required as documentation of continued tax liability to the home country.

You must apply for tax exemption / tax card from Tax Center Aalborg, cf. forms and letters on the payroll office's website. The form states that the scholarship in question is "EU scholarships" and which scholarship it is, e.g. Marie Currie Fellow or "external funding for a PhD fellow in the home country". You can apply for a tax exemption / tax card for recipients of funds from a specific EU programme/project.

EU scholarships and scholarships from external funds are considered B-income. Reporting to the tax authorities will be done automatically via SLS (the payroll system), regardless of whether the amount is tax-free in Denmark or not.

A maximum of 1 year

Scholarship paid to a person who is enrolled as a PhD fellow at AAU. The person stays in Denmark for 3 years - however, interrupted by stays abroad.

It will be a taxable scholarship. The person is fully liable to tax pursuant to section 1(1) of the Danish Act on Withholding Tax at Source. The exemption provisions in section 8(2) of the Act on Withholding Tax at Source (cf. above) do not apply.

You must apply for a tax card at the Tax Centre Aalborg, cf. forms and letters on the payroll office's website. The form states that this is "Other scholarships for foreign PhD fellows who are enrolled as PhD fellows at AAU".

A maximum of 3 years

Payments are posted on the basis of type 529014 EU scholarships.

These are foreign students who are enrolled in a study programme at AAU who receive a scholarship that is given by AAU on the basis of a grant from a partner, e.g. Oticon.

This is a scholarship that is paid to the student because she/he is a student and not because she/he performs work for the partner or AAU.

If the stay in Denmark does not exceed 365 days and the student is continuously liable to income tax in the home country, the tax treatment will take place in accordance with section 8(2) of the Danish Act on Withholding Tax at Source. If the stay exceeds 365 days and the student is continuously liable to income tax in the home country, the tax treatment for the first 365 days will normally take place in accordance with section 8(2) of the Danish Act on Withholding Tax at Source. From the 366th day, it will in any case be a taxable scholarship. For stays of less than 365 days, a certified residence form will not be required as documentation of continuous tax liability to the home country.

You must apply for tax exemption / tax card from Tax Center Aalborg, cf. forms and letters on the payroll office's website. The form states that it is "Externally funded scholarships" and who the partner is. It must be stated when the student has started his/her stay in Denmark and during which period the scholarship will be paid. A possible tax exemption depends on which country the person comes from and the duration of the stay.

The scholarship will be handled as either tax-free or taxable B-income (- labour market contribution). Reporting to the Danish Tax Administration will be done automatically via the State Payroll System, regardless of whether the amount is tax-free in Denmark or not.

Payments are posted to art 529015 External scholarships

These can be payments to both Danish and foreign students. The research year shall have a maximum duration of 12 months. No later than 3 months after the end of the research year, the student must submit his/her final report in 3 copies to the PhD Office at the Faculty of Health and Medical Sciences.

There is no upper limit for the scholarship, but the amount must be at least DKK 10,000.

It is possible for the enrollee to be seconded during the research year. No further amounts will be granted in this regard.

It is a condition for becoming a research year student that the student puts his/her regular studies on hold during the research year.

Reporting to the tax authorities will be done automatically via SLS (the payroll system)

These are payments to foreign young candidates (students with a master's or PhD degree) with research ambitions who wish to advance their research careers by being affiliated with an international research environment for a period of time – possibly concluding with a PhD. –degree. Characteristic is that the person in question does not have an employment relationship in his/her home country, is not enrolled in a study programme, has an employment-like relationship at AAU (must not be on probation/seen before any actual employment at AAU).

You must apply for a tax card at the Tax Centre Aalborg, cf. forms and letters on the payroll office's website. The form states that it is a "Trainee scholarship for foreign young graduates".

When attaching trainee fellows who do not come from an EU/EEA country, you must apply for a residence and work permit (Further information about residence and work permits can be obtained from the HR Department).

Payment of scholarships is considered A-income. A-tax and labour market contributions must be withheld.

Reporting to the tax authorities will be done automatically via SLS (the payroll system).

A maximum of 1 year

The payment is posted to the Art 529013 Trainee Scholarships