(2025)
Legal situation regarding first degree and tax deduction of expenses
A first degree is when the degree is undertaken as the first professional training directly after leaving school (e.g. A-levels). In this case, study costs can only be deducted as special expenses up to a limit of 6,000 Euro per year.
However, if a first degree is undertaken after completing vocational training, the costs can be claimed as income-related expenses without limit. This regulation also applies to degree programmes considered as anticipated income-related expenses (BFH ruling of 18.6.2009, BStBl. 2010 II p. 816).
If you complete your first degree as part of a training employment (e.g. vocational academy, dual study programmes), the study costs can also be deducted as income-related expenses without limit, as the training salary is taxable.
Unlimited deductibility of income-related expenses in the first degree
In certain cases, study costs can also be deducted as income-related expenses without limit during the first degree (BMF letter of 22.9.2010, BStBl. 2010 I p. 721):
- If two or more degree programmes are started in parallel and completed differently, the second is considered a second degree after the first degree is completed, and expenses are then considered income-related expenses.
- For lawyers and trainee teachers, the first state examination counts as a professional qualification. The costs of the traineeship can then be deducted as income-related expenses without limit.
- The Bachelor's degree is also considered a professional qualification. A subsequent Master's degree is considered a second degree, and the costs can be deducted as income-related expenses without limit.
After years of uncertainty, the Federal Constitutional Court confirmed that the regulation preventing the deduction of expenses for a first degree as income-related expenses is constitutional (BVerfG decision of 19.11.2019, published on 10.1.2020).
