Scientific scholarships in NCN-funded research projects, doctoral scholarships and other financial resources under the ETIUDA call exempt from tax in 2019 and 2020

On 17 October 2019, the Regulation exempting income (revenues) from certain scholarships and other financial resources awarded by the National Science Centre from personal income tax of 14 October 2019 was published in the Journal of Laws (Journal of Laws of 2019, item 1982). The Regulation signed by the Minister of Finance, Investment and Development has been in force since 18 October 2019 and applies to income (revenues) generated between 1 January 2019 and 31 December 2020.

Pursuant to the Regulation, tax is waived for:

1. doctoral scholarships and other financial resources awarded under the ETIUDA call,
2. scientific scholarships awarded and paid under research projects in all NCN calls under which such scholarships can be planned and paid (OPUS, SONATA, SONATA BIS, MAESTRO, SYMFONIA, DIOSCURI, international bilateral or multilateral calls).

According to the National Science Centre, pursuant to the Regulation scholarship grantees may recover any advance payments made on scholarships between 1 January 2019 and the date the Regulation entered into effect. However, scholarship grantees should contact the competent tax authorities for more information on how to proceed with the recovery of advance payments. The National Science Centre will not provide any information on this issue.

Following the entry into force of the Act on Higher Education and Science of 20 July 2019 entering into effect on 1 October 2018 (Journal of Laws, item 1668, as amended) (hereinafter referred to as “Act 2.0.”) along with other legal acts reforming the system of higher education, the tax regulations concerning scientific scholarships awarded under NCN-funded research projects have, inter alia, been amended.

Pursuant to Article 21 (1) (39) of the Act on Personal Income Tax of 26 July 1991, in force before 1 October 2018, the following scholarships were exempt from tax: scientific scholarships and merit-based scholarships awarded according to the rules approved by the Minister of Higher Education, having consulted the General Council for Science and Higher Education, or by the Minister of Education.

The above category included scientific scholarships awarded under NCN-funded research projects carried out under, inter alia, OPUS, MAESTRO and SONATA BIS calls.

However, as of the effective date of Act 2.0, in particular the Act enacting the same (i.e. the Act of 3 July 2018 - Provisions Enacting the Act on Higher Education and Science (Journal of Laws of 2018, item 1669, as amended)), new Article 21 (1) (39) of the Act on Personal Income Tax became effective which, in the opinion of the National Science Centre, does not give grounds for exemption of scholarships granted under NCN-funded projects from income tax.

However, pursuant to Article 339 of the above Act of 3 July 2018 enacting Act 2.0., scholarships awarded according to the rules approved by the Minister of Higher Education received after the effective date of Act 2.0 (i.e. after 1 October 2018), are exempt from personal income tax pursuant to Article 21 (1) (39), (40) and (61) of the Act on Personal Income Tax in effect before 1 October 2018.

This means that pursuant to the applicable regulations of awarding scientific scholarships, all scientific scholarships awarded before 1 October 2018 in NCN-funded projects will be exempt from tax pursuant to the foregoing provision, regardless of being paid after the effective date of Act 2.0.

The National Science Centre has already announced that as a consequence of Article 21 (1) (39) of the Act on Personal Income Tax being amended, certain measures have been taken to bring into force the regulations exempting the said scholarships from income tax. Following many months of work by the Polish Ministry of Science and Higher Education, the Ministry of Finance, the Ministry of Investment and Development and the National Science Centre, on 14 October 2019, the Minister of Finance, Investments and Development signed the Regulation exempting income (revenues) from certain scholarships and other financial resources awarded by the National Science Centre from personal income tax.

The National Science Centre continues its endeavours to resolve this issue in a systemic manner through appropriate amendments to the current Act on Personal Income Tax.