Tax incentives related to the provision of scholarships

Companies are entitled to a tax deduction if they provide a scholarship to a pupil in secondary education or a student in higher education for a minimum of 1 year and a maximum of 2 years in an educational institution in EU-27 or in a country of the European Economic Area. The scholarship holder is a pupil in the last two classes of acquiring secondary education or a student in the last two years of acquiring a bachelor or master degree and is under 25 years of age. The amount deducted from the tax base is equal to the scholarship paid (as long as the amount is not higher than 10% of the taxable profits). The incentives are constructed in line with comparable incentives regarding donations of companies. The company and the scholarship holder have to sign a contract regulating the conditions upon which the scholarship is provided. According to the law, the occupation of the scholarship holder has to be relevant to the activities of the company. Furthermore, upon completion of the study programme, the company is obliged to hire the pupil/student for a period longer or equal to the total number of months for which the scholarship is provided. The tax incentive consists of allowing the deduction of costs that would not be treated as corporate costs otherwise. The scheme can be used once in each calendar year.