Gary Gannon (Dublin Central, Social Democrats)
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289. To ask the Minister for Finance if Innovate for Ireland PhD candidates will pay income tax, USC or PRSI. [51694/22]

Gary Gannon (Dublin Central, Social Democrats)
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290. To ask the Minister for Finance if he will clarify the specific laws, policies or exemptions that mean that stipends are untaxed income. [51697/22]

Rose Conway-Walsh (Mayo, Sinn Fein)
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291. To ask the Minister for Finance if he will clarify the specific legislation that allows PhD stipends to be provided as untaxed income; and if he will make a statement on the matter. [51737/22]

Rose Conway-Walsh (Mayo, Sinn Fein)
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292. To ask the Minister for Finance if Innovate for Ireland PhDs will pay income tax, USC or PRSI; and if he will make a statement on the matter. [51738/22]

Paul Murphy (Dublin South West, RISE)
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294. To ask the Minister for Finance the specific laws, policies or exemptions that mean that stipends are untaxed income. [51745/22]

Paul Murphy (Dublin South West, RISE)
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295. To ask the Minister for Finance if Innovate for Ireland PhDs will pay income tax, USC or PRSI. [51746/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 260, 261, 289, 290, 291, 292, 294 and 295 together.

As the Deputies may be aware, income arising from a scholarship held by an individual receiving full-time instruction at a university, college, school or other educational establishment is exempt from income tax, Universal Social Charge (USC) and PRSI where the conditions for the relief in accordance with Section 193 of the Taxes Consolidation Act (TCA) 1997 are met.

I am advised by Revenue that, in order to qualify for the exemption, one of the key requirements is that the individual in receipt of the scholarship income must be in full-time instruction at an educational establishment. In addition, the object of the scholarship must be the promotion of the education of the holder rather than the promotion of research through the holder. For the scholarship exemption to apply, there must be no element of service (directly or indirectly) between the sponsor and the student, and the award must not arise from an office or employment (directly or indirectly) with the sponsor.

Revenue also advises that fellowships are generally regarded as being distinct from a scholarship. Students, for example post-doctoral students, who have a salaried position in order to provide research services are not considered to be under full time instruction. In such cases, the scholarship exemption does not apply, and PAYE must be operated by the payer. Further details in relation to the scholarship exemption can be found on Revenue’s website at www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-26.pdf

Finally, in the case of stipends to participants in the Innovate for Ireland programme, Revenue advises that in order for the exemption from tax, USC and PRSI to apply, it will be necessary for the students to meet the conditions set out in section 193 TCA 1997. Otherwise, the stipends will be taxable in full.