Tax on payments received in support of education/living expenses
Skriven av andyit den 16 Augusti, 2021 - 02:48
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I was working with a US company in Asia. They provided me with sabbatical for higher studies and agreed to sponsor my education and living expenses due to my exceptional performance during the last years. The total amount of 300k SEK was the total budget set by the company for 2 years. Every month I was able to withdraw an amount within a certain range and it was transferred from companies account directly to my student account. The payments that I received in my bank showed the sender as the company name or sometimes as Veem. The amounts used to vary between 12k to 14k Krones per month and the total did not exceed 300k Krones for the two years. According to Swedish law, I need to confirm that if I am getting sponsored for my education / living expenses, do I need to pay tax on that? Also, will that letter / contract from the company stating this would be accepted by the bank ?
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Hi!
Since you are still employed by the company my assessment would be that the payment you receive is taxable in Sweden. You need to contact the bank directly and see if they accept the letter.
Kind regards
Daniel
Daniel Andersson är skattejurist hos Skattepunkten AB
Thank you for the response. I am not employed by the company at the moment. I had to resign and take a leave for two years for my education. During my education, I was not employed by the company.
Andy
Hi,
If you are not employed by the company it is normally not taxable in Sweden since it is not a compensation for work. It would probably be seen as a scholarship.
Kind regards
Daniel
Daniel Andersson är skattejurist hos Skattepunkten AB
Thank you for the response. I read it online that scholarships paid periodically are not tax-exempt. So should I submit the contract to the bank that says it is a scholarship or gift?
Andy
Hi Andy,
Since the scholarship would be for education, it is tax free even if you receive it periodically. Gifts are always tax free.
Kind regards
Daniel
Daniel Andersson är skattejurist hos Skattepunkten AB
Hi Daniel,
Thanks again. Last question, The scholarship was for education but since I don't pay the fee being an EU student the money I was getting was being spent on living+ traveling expenditure and some of it was saved by me at the month-end. If the scholarship is specifically for education does it means it has to be for the tuition fees?
The letter should show it as a scholarship or funding for living expenses?
Or is it the same thing?
Thank you.
Andy
Hi Andy,
The scholarship don´t need to be for tuition fees so you can use it for living and traveling.
It would be good if the letter states scholarship for education.
Kind regards
Daniel
Daniel Andersson är skattejurist hos Skattepunkten AB