Tax allowance - work-related (income-related) expenses/special expenses
- Name of the instrument - Local language
- Steuerliche Absetzbarkeit als Werbungskosten/Sonderausgaben
- Name of the instrument - English translation
- Tax allowance - work-related (income-related) expenses/special expenses
- Country
- Germany
- Type of instrument
- Tax incentive for individuals
- Type of entry
- Single instrument
- Short description
Adults can deduct costs related to their continuing vocational training for their current occupation or a future occupation from the base of their individual income tax. The state co-funding – in the form of foregone tax revenues - equals to eligible costs multiplied by the marginal tax rate (between 15% and 45%). For the deduction, a ceiling of EUR 4 000 (2014) is introduced.
- Short description of the related instruments
nap
- Level of operation
- National
- Name of a part of the country
- nap
- Name of the region (for regional instruments)
- nap
- Name of the sector (for sectoral instruments)
- nap
- Relevance
- Key scheme
- Legal basis
§9 and §10(1) No 7 EStG German Income Tax Act
Law on Amendments to the Tax Code and other laws 21.7.2004 (§ 10 para. 1 no. 7 EStG)- Objective(s) and target(s)
No specific objectives given in the legal act
- Year of implementation
- 2004
- Operation/Management
The scheme is part of the federal taxation system. Costs for education and training reduce the base of the tax calculation.
- Eligible group(s)
Employees and self-employed
- Group(s) with preferential treatment
None
- Education and training eligible
- Education (in general schools, colleages, unversities)
- Training in a profession not related to the current employment and with the aim of changing the profession
- Further training in the current profession to expand or adapt to changing requirements
- Retraining (when employment in the current profession can not be continued due to health reasons).- Source of financing and collection mechanism
State (loss of tax revenue)
individual- Financing formula and allocation mechanisms
Eligible costs reduce the tax base. The reduction is a benefit in line with the marginal tax rate (15 - 45%); however, training costs together with other eligible costs must be higher than a basic allowance for becoming effective.
Details of tax treatment (depending on the type of education and training):
- education: special expenses - partial deductibility
- training not related to the current profession: special expenses - partial deductibility
- furher training in the current profession: expenses deductible without limit
- retraining due to health reasons: extraordinary burdens (deductible without limit)Educatio and training costs can be classified as deductable only up to EUR 40 00 as special expenses per calendar year.
- Eligible costs
Fees and other costs related to education and training (such as costs for teaching material and professional literature, related travel and accommodation costs, costs of a computer).
- Frequency of the use
Each year
- Volumes of funding
na
- Beneficiaries/take up
na
- Organisation responsible for monitoring/evaluation
Federal Ministry of Finance.
- Monitoring/evaluation reports available
na
- Most relevant webpage - in English
http://www.make-it-in-germany.com/en/for-qualified-professionals/workin…
- Most relevant webpage - local language
http://www.bildunghoch2.de/cms/index.php?option=com_content&view=articl…
- Sources
Dohmen, Dieter. (2013). Finanzierung beruflicher Weiterbildung in Deutschland. Report. Zeitschrift für Weiterbildungsforschung. H, 3, 61-84.