Au pair stay: Language lessons count as vocational training

Many school leavers are drawn abroad for a period of time after their A-levels. As an au pair, they want to improve their language skills with language lessons and get to know the country and its people. In return for free board and lodging, the host family expects help with childcare and household duties. During the stay abroad, parents are only entitled to child benefit or tax allowances if the au pair stay is considered vocational training.

How can an au pair stay be recognised as vocational training? It is necessary for the child to attend theoretical and systematic language lessons for at least 10 hours per week.

Does it have to be exactly 10 hours per week, or might 8.6 hours per week be sufficient?

In addition to pure language lessons, the au pair must also spend time on preparation and follow-up. Currently, the Federal Fiscal Court has ruled that language lessons of only 8.6 hours per week are not sufficient. Therefore, the au pair stay abroad cannot be recognised as vocational training. In this case, neither child benefit nor child allowances were granted. "If the average is less than 10 hours per week, exceptionally individual months can still be considered as vocational training if they are characterised by intensive lessons of significantly more than 10 hours, e.g. due to block lessons or courses" (BFH decision of 14.06.2016, III B 132/15). Exceptionally, language lessons of less than 10 hours per week may be sufficient for recognition as vocational training. This is the case if foreign language lessons are a mandatory requirement in a training or examination regulation or if the language lessons prepare for a recognised foreign language test. The two most important English language tests are TOEFL (Test of English as a Foreign Language) or IELTS (International English Language Testing System). (BFH ruling of 15.03.2012, III R 58/08; BFH ruling of 26.10.2012, VI R 102/10).

TOEFL foreign language tests count as vocational training

Currently, the Saarland Fiscal Court has confirmed that an au pair stay after passing the TOEFL language test can be considered vocational training. However, one condition was particularly emphasised: Even if the acquisition of foreign language skills is verified by a language test - such as TOEFL or IELTS - there must still be a concrete connection to vocational training. It is therefore important that studies or other training are started or continued immediately (FG Saarland of 02.02.2014, 2 K 1308/13, final).

(2021): Au pair stay: Language lessons count as vocational training

What can I deduct for full-time training or education?

Costs for training or further education can be deductible as income-related expenses, business expenses, or special expenses. Expenses for initial vocational training outside of an employment training relationship and for a first degree are - at least according to current legal status - only deductible as special expenses up to a limit of 6,000 Euro.

In other cases, expenses can be deducted as income-related expenses or as preliminary income-related expenses without limit. This also applies to new vocational training after completing an initial training, as well as vocational training within an employment training relationship, e.g. apprenticeship, traineeship. Important items include travel, meals, accommodation, and incidental travel expenses.

If you, as an employee, participate in a training measure outside your company as part of your employment, it is considered an off-site activity. You can claim your expenses according to travel cost principles - i.e. travel costs with the business travel allowance, meal allowances, incidental travel expenses, and possibly accommodation costs - as income-related expenses.

This applies to people who continue their education or training in the evenings and at weekends alongside their job. This has been the case so far and continues to apply.

However, the situation is different if you undertake a full-time training measure or full-time study outside your employment:

(1) Until 2013, the educational institution does not become a "regular workplace" if an employee undertakes a long-term training measure and visits the educational institution for over four years. This is also because it is not a company facility of the employer. Travel costs are therefore deductible according to the rules for off-site activities with the business travel allowance and meal allowances (BFH rulings of 09.02.2012, VI R 42/11 and VI R 44/10).

(2) However, since 2014, it is stipulated in the law that for full-time education, the educational institution is the "first place of work" (even though it is not an employer's facility). This means: Journeys are only deductible with the distance allowance, and meal allowances are not considered. This applies both to further training for unlimited income-related expense deduction and to training for limited special expense deduction.

(2021): What can I deduct for full-time training or education?

When can I claim a home office for training?

Expenses for initial vocational training and first degree studies not undertaken as part of an employment-based training programme (e.g. apprenticeship) are, under current law, only deductible as special expenses up to a limit of 6,000 Euro. In contrast, the costs for a first degree following an apprenticeship or for further training can be fully deducted as business expenses.

Deductible costs may also include costs for a home office.

For the tax recognition of a home office as part of special expenses, the same regulations apply as for the deduction of business expenses. A home office is recognised if "no other workplace" is available for the training or if the home office is the "centre of all professional activity", e.g. in the case of distance learning (BMF letter dated 02.03.2011, BStBl. 2011 I p. 195, para. 24).

If a home office is used for both training and professional purposes, the home office costs must be divided according to the proportion of use, estimated as follows:

• The portion of costs attributable to training is deductible as special expenses, together with other training costs up to 6,000 Euro.
• The portion of costs attributable to professional activity can be deductible as business expenses or operating expenses.
• If you meet the deduction requirement up to 1,250 Euro because "no other workplace is available", this maximum amount must be divided according to the proportion of use between special expenses and business expenses or operating expenses. Only the actual costs up to the respective proportional maximum amount are deductible.
• If you meet the deduction requirement for unlimited business expenses because "the home office is the centre of professional activity", the professional use portion is fully deductible. However, this is rarely the case, e.g. in the case of distance learning and freelance secondary employment.

(2021): When can I claim a home office for training?

First degree: What are the chances of a full deduction of income-related expenses?

Expenses for the first vocational training and for the first degree as initial training, which are not completed as part of a training employment relationship (e.g. apprenticeship), are currently only deductible as special expenses up to a limit of 6.000 Euro, while the costs for any educational measures after completing vocational training, including a first degree after an apprenticeship, can be fully considered as business expenses (§ 4 para. 9, § 9 para. 6, § 10 para. 1 no. 7 and § 12 no. 5 EStG).