Should the work-related expenses be reduced by the master's bonus?

Do the professional expenses need to be reduced by the Meisterbonus?

Training for a master's qualification is expensive, but the expenses are tax-deductible as professional expenses. In several federal states, there has been a so-called Meisterbonus for some years, which is granted to graduates of a master's examination as an incentive for professional development. A common question is: Does this bonus have to be credited against professional expenses?

Tax treatment of the Meisterbonus

In Bavaria, since 1 September 2013, all successful graduates of vocational master training have received a Meisterbonus of 1.000 Euro. Other federal states such as Saxony, Rhineland-Palatinate, and Mecklenburg-Western Pomerania have introduced similar programmes to promote professional development.

The Munich Tax Court has ruled that the Meisterbonus does not have to be credited against deductible training costs. The bonus is not taxable income, as it is neither linked to a type of income nor to the generation of income. The bonus is paid solely on the basis of the successful completion of the training, regardless of the actual expenses incurred (Munich Tax Court, judgment of 30 May 2016, 15 K 474/16).

No reduction of professional expenses

The tax authorities have accepted the court's decision. The Meisterbonus is not only tax-free but is also not taken into account when deducting professional expenses. This means that you can claim your training costs in full as professional expenses without the bonus being credited (Bavarian State Office for Taxes, directive of 6 July 2016).

Examples from other federal states

In Saxony and Mecklenburg-Western Pomerania, there are also similar bonuses for master graduates, such as the Meister-Extra. These are also granted tax-free and do not affect the deduction of training costs as professional expenses. Reference is also made to the decision of the Bavarian State Office for Taxes.

Loan waiver for training

Another issue is the waiver of loans after passing the master's examination. If training was funded through low-interest loans and parts of the loan are waived after passing the exam, the question arises as to whether this waiver is taxable.

The Lower Saxony Tax Court initially ruled that such a loan waiver remains tax-free, as it does not constitute taxable income. However, the Federal Fiscal Court (BFH) overturned this ruling in an appeal (BFH judgment of 23 November 2023, VI R 9/21). The loan waiver must now be recorded as income in the type of income where the professional expenses were deducted.

BFH ruling on loan waiver

The BFH justified its decision by stating that the waiver is based on professional reasons, as it is solely linked to passing the exam. Since the professional expenses for the course and examination fees were previously claimed, the loan waiver must be recorded as income in the year of the waiver.

Conclusion

• Meisterbonus: The Meisterbonus is granted tax-free in most federal states and does not need to be taken into account for professional expenses. Training costs can therefore be deducted in full as professional expenses.
• Loan waiver: If a loan was taken out to finance the training and partially waived after successful completion, the waiver is considered income that must be taxed if the corresponding expenses were previously deducted as professional expenses.