(2023)
When study costs are unequivocally deductible as income-related expenses
Expenses for a first degree following A-levels and for initial vocational training outside of an employment training relationship are only deductible as special expenses up to a limit of 6,000 Euro (§ 10 para. 1 no. 7 and § 9 para. 6 EStG). This regulation is constitutional. In other cases, expenses are deductible as business expenses without limit, either as advertising 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 as part of an employment training relationship (apprenticeship, traineeship, dual study programme), as the training allowance is taxable. In the following cases, study costs are unquestionably deductible as advertising expenses without limit:
- 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 as part of an employment or training relationship, e.g. for officers and career soldiers in the German Armed Forces or as part 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 advertising expenses from this point onwards.
- A degree qualifying for a profession is 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 deductible as advertising expenses without limit.
- A bachelor's or baccalaureate degree is also considered a degree qualifying for a profession. A subsequent degree programme is a second degree, so these expenses are deductible as advertising expenses without limit. 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 advertising expenses.
- Lawyers occasionally complete an additional "Master of Laws" (LL.M) degree at a foreign university after passing the first state examination. Related expenses are fully deductible as advertising expenses if they are professionally motivated.
- A doctorate or doctoral studies are generally undertaken after completing a first degree. Therefore, the expenses are deductible as advertising expenses without limit, provided there is a professional connection. The costs of a doctorate are even considered as advertising expenses if, in individual cases, it is undertaken without a prior degree qualifying for a profession.
If you change your course of study without completing the initially started programme, e.g. from law to medicine, the first degree is not considered completed. Consequently, the new course of study is not a second degree, and the expenses for it are only deductible as special expenses.
