Guidelines on gifts & scholarships

...with and without a specific purpose

In a small number of instances, Aarhus University (AU, faculty, department/school or centre) receives grants and gifts for which the donor does not require anything specific in return and where the grant/gift is not intended to cover a specific project or topic during a given period.

In some instances, researchers at Aarhus University also receive personal grants, gifts, prizes and scholarships that they wish to transfer to the university, with or without stating any specific purpose.

The university’s guidelines on receipt and accrual of such grants, gifts, prizes and scholarships are set out below. The guidelines should be seen in the light of comments by the university auditor and Act No. 546 of 26 May 2010 on amendment of the Danish Tax Assessment Act (Ligningsloven) (deductions for private donations for research etc. (in Danish)).

If Aarhus University receives grants and gifts

Grants and gifts (without anything specific required in return) given to Aarhus University – whether to AU as such or to a faculty, department/school or centre – must, in accordance with the government’s accounting rules, be recognised as income upon receipt (unless they are used to set up foundations and scholarships under Section 20(2) of the Danish University Act). This means that the university cannot recognise them as income in step with spending, but that such gifts/grants must be recognised as income at once and will affect the university’s financial results and equity unless the amount is used in full in the year in which it is paid. The amount is therefore handled in line with the approach for ordinary funding in divisional financial statement 1.

If a researcher receives grants, gifts or scholarships – three options

  • Scholarship to cover the costs for academic work (with purpose)

    • Scholarship to cover the costs for academic work (with purpose)

      The researcher receives a scholarship to cover the costs for academic work. Scholarships issued for this purpose are tax-free for the individual researcher in accordance with section 7K(4) of the Danish Tax Assessment Act (Ligningsloven), if the researcher wishes to transfer the scholarship received to the university. This must be done by means of a written letter of transfer, stating the specific (research) purpose for which the scholarship is to be used, and setting a time limit for its use in order to ensure follow-up, review and clear-up.

      In this case, the researcher will be able to transfer the scholarship to the university without any tax-related consequences for the researcher, in accordance with the Danish Tax Assessment Act (Ligningsloven), Section 8H(1) (as amended in Act No. 546 of 26 May 2010). The university must notify the Danish Customs and Tax Administration (SKAT) that the gift has been received from the researcher.

      The transfer document (in Danish) must be signed by the researcher and the head of department (Aarhus BSS, ST, HE)/head of school (Arts) or dean, and enclosed when the project is created in the financial management system. The funds will then be accrued as external grants. The funds will then be definitively transferred to the university and will be covered by the university’s rules and guidelines.

  • Gifts/prizes not requiring anything specific in return, where the researcher keeps the amount (without any purpose)

    • Gifts/prizes not requiring anything specific in return, where the researcher keeps the amount (without any purpose)

      The researcher receives a gift/prize for which the provider does not require anything specific in return, and where the grant/gift is not intended to cover a specific project during a given period. Prizes and gifts given to a researcher on these conditions entail tax liability for the individual researcher for the full amount, if he/she chooses to keep the amount.

  • Gifts/prizes not requiring anything specific in return, where the researcher transfers the amount to AU (without any purpose)

    • Gifts/prizes not requiring anything specific in return, where the researcher transfers the amount to AU (without any purpose)

      The final option is that the researcher receives a gift/prize for which the donor does not require anything specific in return, and where the grant/gift is not intended to cover a specific project during a given period.

      If, in advance in connection with receipt of the gift/prize, the researcher chooses to surrender it in favour of the university without imposing any requirements, then the researcher will not be taxed for it. The university must handle such gifts (without anything specific being required in return) in accordance with the rules governing the acceptance of gifts without any purpose, including recognition as income in line with the approach for ordinary funds.

      The funds are then definitively transferred to the university, to be used freely by the university’s management in connection with the university’s purpose.

Exemption from inheritance tax

Aarhus University is exempt from inheritance tax (also called estate tax) cf. decision from the Danish Tax authorities. This means that money bequeathed to AU for research is not taxed.

The exemption appears on the website for SKAT at C.A.4.3.5.9 List of approved associations – Skat.dk (in Danish).

AU appears on the list under VAT number 31119103. The university is approved as a charitable or otherwise non-profit organization/institution – approved according to LL §8 A, LL §12, subsection 3, or according to BAL section 3, subsection 2.