Science prize tax-free? – Federal Fiscal Court provides clarity!
A breakthrough for researchers: In its ruling from November 21, 2024 (case no. VI R 12/22), published on March 13, 2025, the Federal Fiscal Court (BFH) decided that prize money for scientific achievements does not automatically count as taxable wages. A professor who had received a scientific prize for his habilitation thesis successfully defended himself against the tax office – with success.
What had happened?
The professor had received the prize money for scientific publications that had been produced before his employment at the university. The tax office nevertheless classified the money as income from employment. However, the BFH clarified: only if prize money is paid for services within the scope of an existing employment relationship does it constitute wages. In this case, however, the origin of the benefit was outside the employment relationship – the prize money therefore remains tax-free.
What does that mean for you?
This decision is particularly relevant for:
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Scientists who research and publish outside of their employment
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Universities and research institutions that offer or pay out prize money
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Tax consultants and HR departments that need to classify salary components correctly
The ruling provides more legal certainty and could provide new impetus for independent research – with tax benefits!
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