The preconditions for tax exemption on fellowships in Germany (§ 3 No. 44 EStG) are:
- award from public funds or via a public or non-profit agency (as far as recognised according to German law) or from an interstate or supranational institution of whom the Federal Republic of Germany is a member
- sponsoring research or academic or artistic training or continuing education
- no higher than the amount required to fulfill the research task or to cover living and training needs
- grant according to the regulations of the donor
- no quid pro quo requirement or employment of the recipient
Please note that employment contracts funded by fellowships (for example those through the Marie Skłodowska-Curie Actions) are generally not exempt from tax as they are subject to regulations related to wages.