(2022)
When study costs are unequivocally deductible as income-related expenses
Expenses for a first degree following secondary school and for initial vocational training outside of an employment training relationship are only partially deductible as special expenses up to 6.000 Euro (§ 10 para. 1 no. 7 and § 9 para. 6 EStG). This regulation is constitutional. In other cases, expenses are fully deductible as business expenses or as pre-employment expenses - or for the self-employed as business expenses - e.g. for job-related training after completing initial training or a first degree, for a second degree or retraining. This also applies to initial vocational training within an employment training relationship (apprenticeship, traineeship, dual study programme), as the training allowance is taxable. In the following cases, study costs are unquestionably fully deductible as business expenses:
- First degree after completing vocational training, e.g. degree after an apprenticeship (BFH ruling of 18.6.2009, BStBl. 2010 II p. 816).
- First degree within a service or employment training relationship, e.g. for officers and career soldiers of the Bundeswehr or within the framework of dual vocational training (dual study programme).
- Second degree after completing a first degree. Provided the degree is sufficiently related to future income from the intended occupation and is not pursued out of purely private interest.
- University degree after completing a degree at a university of applied sciences or after studying at a teacher training college or art college.
- If two or more degree programmes are started in parallel and completed at different times, the second degree programme is considered a second degree after the first degree has been completed, meaning that expenses can be considered as business expenses from this point onwards.
- A professional qualification is considered to be the first state examination, which provides the professional qualification for a preparatory service. Therefore, expenses for the traineeship for lawyers and trainee teachers after the first state examination are fully deductible as business expenses.
- A bachelor's degree is also considered a professional qualification. A subsequent degree programme is a second degree, so these expenses are fully deductible as business expenses. This mainly applies to a master's degree, as this cannot be started without a completed bachelor's or other degree.
- An MBA programme leading to a "Master of Business Administration" generally requires a completed university degree. Therefore, it is a second degree, and the expenses are fully deductible as business expenses.
- Lawyers occasionally complete an additional "Master of Laws" (LL.M) degree at a foreign university after passing the first state examination. Expenses related to this are fully deductible as business expenses, provided they are professionally motivated.
- A doctorate or doctoral studies are generally undertaken after completing a first degree. Therefore, the expenses for this are fully deductible as business expenses, provided there is a professional connection. The costs for a doctorate are even considered as business expenses if, in individual cases, it is carried out without a prior professional qualification.
If you change your degree programme without completing the initially started course, e.g. from law to medicine, the first degree is not considered completed. Consequently, the new degree programme is not a second degree, and the expenses for it are only deductible as special expenses.
