Prize money for the dissertation must be taxed


Prize money received for a dissertation must be stated in the tax return and is subject to income tax liability. This emerges from a judgment of the FG Cologne.

The doctoral student had written her dissertation while working as a research assistant at an institute of a university. She received prize money for her doctoral thesis, which was sponsored by a company and awarded by the university.

She did not enter the prize money in her tax return, but claimed the printing costs of her dissertation as part of the advertising costs.

The tax office was of the opinion that the prize money was wages, which of course also had to be taxed.

Prize money taxable – that is the reason

The doctoral candidate opposed this – but to no avail. The tax office rightly taxed the prize money as wages, explained the FG Cologne. The award money was presented “from an objective point of view for the applicant in the broadest sense as the fruit of her work as a research assistant”, the judges wrote in their judgment and based this opinion as follows:

  • The applicant completed her dissertation (also) as part of her employment as a research assistant. The applicant’s employment contract does not contain an express obligation to do a doctorate, but the employment relationship has given her the opportunity to do so. The applicant’s dissertation is thus also the result of her paid work as a research assistant.

  • The award was given by the applicant’s former employer, the university. At least life experience suggests that, in case of doubt, all benefits in the relationship between the employer and his employee are made from the point of view of the exchange of service and consideration. The fact that the applicant also wrote her dissertation outside of her work as a research assistant and that the award is also open to doctoral students who are not academic staff at the university does not change this assessment.

  • The dissertation does not belong to the applicant’s privacy, but to her sphere of activity. This basically results from the fact that a dissertation is, on the one hand, a prerequisite for the academic career of an academic and, on the other hand, doctoral students promise better chances in their professional lives from a doctoral degree, be it in terms of access to a job or higher pay.

  • The applicant herself assigned her dissertation to her current and future income from employment by claiming the printing costs there as advertising costs. In doing so, she expresses the fact that her dissertation was triggered by, or directed towards, taxable income. If the dissertation belongs to the applicant’s sphere of activity, then the economic benefits obtained from this dissertation also fall within the sphere of activity. Because one and the same situation can only be assessed uniformly for tax purposes. Taxing the F price as income from paid work is, so to speak, the flip side of the deduction of advertising costs.

If there is an inseparable economic connection between a prize money and a type of income, the prize money is subject to income tax. There is an economic connection if the award winner has created a special work to achieve the prize money.

There is no economic connection if the taxpayer has received a price for his life’s work.

Since the plaintiff has not appealed the decision, the judgment has now become final (FG Cologne, judgment of February 18, 2020, Az. 1 K 1309/18).

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