When are training costs classed as special expenses and when as income-related expenses?

A distinction is made between training and further training costs as follows:

(1) Training costs are only the expenses for the first professional training and for a first degree as initial training. You can deduct these costs as special expenses, but only up to a maximum amount of 6.000 Euro.

(2) Further training costs are costs for all educational measures taken after the first professional training or after the completion of the first degree. This also includes retraining for a different profession, educational measures in the current profession, further training in a non-practised profession or a second degree. You can fully deduct such costs as income-related expenses. However, it is important that the expenses are related to the profession and that you intend to use the training to generate income.

(3) First or second degree? The costs for the first degree can only be deducted as special expenses to a limited extent. For a second degree, the costs can always be fully deducted as income-related expenses - provided that income is also to be generated. The second degree must not be pursued as a hobby, as some pensioners do, for example.

You can only claim special expenses in the year of payment. So if you are a student with no taxable income, you will not benefit from a deduction for special expenses. However, if you claim the training costs as income-related expenses, you can carry this financial loss forward to your first year of employment in which you earn income. You must then claim your expenses as anticipated income-related expenses.

Mr A and Ms B are students. Mr A has already completed a degree, Ms B has not. Both have no taxable income in the relevant year, but 4.500 Euro in training costs. In the following year, both have similarly paid jobs.

As Ms B is completing a first degree, she can only claim the costs as special expenses in the year in which they are incurred. Without taxable income in that year, she has no tax advantage.

Mr A has completed a second degree. He can declare the training costs in a tax return for the relevant year as income-related expenses and thus incurs a loss. He can also claim this loss in the year after his studies, when he has taxable income.

In the first year after his studies, Mr A therefore pays less tax than Ms B, assuming the same salary.

(2022): When are training costs classed as special expenses and when as income-related expenses?

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).

The Federal Constitutional Court has now ruled: The current legal regulation is constitutional. The fact that expenses for initial vocational training or for a first degree as initial training cannot be deducted as business expenses does not violate the Basic Law (BVerfG decision of 19.11.2019, 2 BvL 22/14, 2 BvL 23/14, 2 BvL 24/14, 2 BvL 25/14, 2 BvL 26/14, 2 BvL 27/14, published on 10.1.2020).

(2022): First degree: What are the chances of a full deduction of income-related expenses?

When study costs are unequivocally deductible as income-related expenses

Expenses for a first degree following secondary school and for initial vocational training outside of an employment training relationship are only partially deductible as special expenses up to 6.000 Euro (§ 10 para. 1 no. 7 and § 9 para. 6 EStG). This regulation is constitutional. In other cases, expenses are fully deductible as business expenses or as pre-employment expenses - or for the self-employed as business expenses - e.g. for job-related training after completing initial training or a first degree, for a second degree or retraining. This also applies to initial vocational training within an employment training relationship (apprenticeship, traineeship, dual study programme), as the training allowance is taxable. In the following cases, study costs are unquestionably fully deductible as business expenses:

• First degree after completing vocational training, e.g. degree after an apprenticeship (BFH ruling of 18.6.2009, BStBl. 2010 II p. 816).
• First degree within a service or employment training relationship, e.g. for officers and career soldiers of the Bundeswehr or within the framework of dual vocational training (dual study programme).
• Second degree after completing a first degree. Provided the degree is sufficiently related to future income from the intended occupation and is not pursued out of purely private interest.
• University degree after completing a degree at a university of applied sciences or after studying at a teacher training college or art college.
• If two or more degree programmes are started in parallel and completed at different times, the second degree programme is considered a second degree after the first degree has been completed, meaning that expenses can be considered as business expenses from this point onwards.
• A professional qualification is considered to be the first state examination, which provides the professional qualification for a preparatory service. Therefore, expenses for the traineeship for lawyers and trainee teachers after the first state examination are fully deductible as business expenses.
• A bachelor's degree is also considered a professional qualification. A subsequent degree programme is a second degree, so these expenses are fully deductible as business expenses. This mainly applies to a master's degree, as this cannot be started without a completed bachelor's or other degree.
• An MBA programme leading to a "Master of Business Administration" generally requires a completed university degree. Therefore, it is a second degree, and the expenses are fully deductible as business expenses.
• Lawyers occasionally complete an additional "Master of Laws" (LL.M) degree at a foreign university after passing the first state examination. Expenses related to this are fully deductible as business expenses, provided they are professionally motivated.
• A doctorate or doctoral studies are generally undertaken after completing a first degree. Therefore, the expenses for this are fully deductible as business expenses, provided there is a professional connection. The costs for a doctorate are even considered as business expenses if, in individual cases, it is carried out without a prior professional qualification.

If you change your degree programme without completing the initially started course, e.g. from law to medicine, the first degree is not considered completed. Consequently, the new degree programme is not a second degree, and the expenses for it are only deductible as special expenses.

(2022): When study costs are unequivocally deductible as income-related expenses

First degree: correctly deduct accommodation costs?

Expenses for a first degree after completing vocational training are deductible as - previously incurred - work-related expenses without limit. In contrast, the costs of a first degree after leaving school are only deductible as special expenses up to 6.000 Euro.

Since children in higher education are often not financially well-off, parents cover various expenses for their education. Landlords often prefer to sign the rental contract for student accommodation with the parents of the student. The question is whether the child can claim the rent and the estate agent's fee as their work-related expenses or special expenses for their first degree, even though these were paid by the parents. Recently, the Lower Saxony Finance Court dealt with the case.

The rental contract for the student accommodation was in the father's name. The father covered the full cost of the accommodation. According to the judges, a distinction must be made between the estate agent's fee and the ongoing rental payments. While the estate agent's fee is recognised as the child's work-related expense, the rental payments are rejected as work-related expenses (FG Niedersachsen, 25.2.2016, 1 K 169/15).

• The estate agent's fee is a service provided by the parents through an "abbreviated contract route". The parents purchase items in their own name for the child, place orders, conclude contracts, and make the required payments themselves. Since the father rented the flat for the first degree, the payment of the estate agent's fee is made in the interest of the child and their studies. The child may claim the parents' payment as their work-related expense.

• The situation is different for ongoing rental payments. Although these are also made through the "abbreviated contract route", there is an exception here. The deduction of work-related expenses is not permitted if the payments are made as part of long-term debt relationships. In these cases, the third party always pays on their own account and only grants the beneficiary a right of use. A rental agreement is such a long-term debt relationship. In this case, the tax authorities refuse to recognise third-party expenses for tax purposes (BMF letter of 7.7.2008, BStBl. 2008 I p. 717). Rental payments for the son are therefore not deductible if the father signed the rental contract and pays the rent.

The question of whether the deductibility of rents and estate agent's fees can be assessed differently in the case of the abbreviated contract route has not yet been decided by the highest court.

Until a ruling by the highest court, it is recommended that the rental contract is in the student's name and the parents are included in the contract only as guarantors, not as tenants. In this case, the parents' rental payments to the landlord are made via the "abbreviated payment route".

Furthermore, you can also make payments to the child, and the child could then pay the rent to the landlord (so-called cash gift).

Recently, the Federal Constitutional Court ruled that the current legal regulation is constitutional. The fact that expenses for initial vocational training or a first degree cannot be deducted as work-related expenses, but only as special expenses, does not violate the Basic Law (BVerfG decision of 19.11.2019, 2 BvL 22/14, 2 BvL 23/14, 2 BvL 24/14, 2 BvL 25/14, 2 BvL 26/14, 2 BvL 27/14, published on 10.1.2020). Therefore, questions regarding the deduction of costs related to studies will often only arise in the case of a second or postgraduate degree or studies after completing vocational training.

(2022): First degree: correctly deduct accommodation costs?

What can be deducted in a dual study programme?

As part of the dual study programme, students complete several practical study semesters in companies outside the university. The student has concluded a training contract with such a company, which includes regulations on the obligations of the company and the student and even provides for a monthly training allowance.

(1) Until 2013, neither the university nor the training company was considered a "regular workplace". This is because an educational measure is always temporary and not permanent. Therefore, travel to the company can also be deducted at the actual amount or with the business travel allowance of 30 cents per kilometre travelled, and a meal allowance of 6 euros can be claimed for absences of at least 8 hours (BFH ruling of 16.1.2013, VI R 14/12).

(2) Since 2014, in the case of full-time study, the educational institution - i.e. the university or college - is legally declared as the "first place of work" - but only if the training takes place outside an employment relationship (Section 9 (4) sentence 8 EStG). However, dual study programmes always take place within the framework of an employment or training relationship. So what applies?

The OFD Niedersachsen currently explains how training in the dual system is to be assessed for tax purposes and what can be deducted as income-related expenses: Trainees are assigned to a specific company through their training contract or civil service trainees through their employment notice. This assignment covers the entire training period and thus the entire duration of the employment relationship (OFD Niedersachsen of 2.8.2016, S 2353-133-St 215).

• As this is a permanent assignment, the training company is the first place of work. Therefore, travel from home to there can only be deducted with the commuting allowance of 30 cents per kilometre, meal allowances are not taken into account.
• If trainees or civil service trainees are temporarily seconded from their first place of work to another company, this is considered a business trip. Travel can be claimed with the business travel allowance of 30 cents per kilometre travelled, as well as meal allowances and accommodation costs.
• Travel between home and the training location as part of working groups is also considered a business trip. Travel expenses can also be claimed according to travel expense principles.
• If trainees or civil service trainees are temporarily seconded from their first place of work to attend courses at an educational institution, this is also considered a business trip.
• For business trips, meal allowances are limited to the first three months. However, it should be noted that the three-month period starts anew if there is an interruption of more than four weeks. This is particularly important for the course period.

Because a training contract is concluded with a company as part of the dual study programme or dual system, this is a training employment relationship. Therefore, training costs - even if it is a first degree - are not limited to 6,000 Euro as special expenses, but are deductible as income-related expenses without limit.

(2022): What can be deducted in a dual study programme?

Reimbursement of training costs are deductible as income-related expenses

The Bundeswehr allows temporary-career soldiers to study at university during their service at the Federal Government's expense, usually human medicine. The soldiers receive a salary but must commit to serving in the Bundeswehr for at least 10 years as medical officers.

In many cases, however, soldiers leave the Bundeswehr after a short time to pursue a civilian career. The Federal Government then demands repayment of the training allowance received during their studies, which amounts to approximately 1,800 Euro per month, as well as subsequent specialist training costs.

To settle the invariably six-figure repayment sums, the Federal Government grants deferrals and instalment payments but charges interest of 4 percent on the deferred amounts. Recently, the Federal Administrative Court ruled in a number of judgments that temporary-career soldiers who have completed a university degree at the Federal Government's expense and leave the Bundeswehr before the end of their commitment period must reimburse their training costs to the Federal Government (BVerwG judgments of 12.4.2017, 2 C 16.16; 2 C 5.16; 2 C 8.16 et al.).

• According to the BVerwG, the Federal Government is fundamentally entitled to reclaim the training allowance granted during the studies and the subsequent specialist training costs. The legally stipulated repayment obligation does not violate the former soldier's property rights but represents an appropriate balance for the legitimate but disappointed expectations of the Federal Government that the soldier would make the specialist knowledge and skills acquired at the Federal Government's expense available to it until the end of the commitment period.
• However, two corrections must be made to the Bundeswehr's calculation practice:
  • Periods during which licensed medical officers perform full service as doctors in a Bundeswehr hospital must lead to a reduction in the repayment obligation (so-called service quota). This also applies if they receive specialist training during this time.
  • The imposition of interest on the deferred amounts is unlawful. There is no legal basis for this.

Recently, it was reported in the press that a former medical officer must repay 57,000 Euro in study costs to the Bundeswehr (Spiegel online of 14.1.2020). The individual had committed to 17 years of service with the Bundeswehr, was able to study medicine at the Bundeswehr's expense with a substantial training allowance, became an officer, and was even allowed to undergo clinical training as a specialist in anaesthesia after his studies. He then served as an army doctor in crisis areas for several years, including Afghanistan. He later refused military service, was discharged early from the Bundeswehr, and is now required to repay part of his study costs.

Recently, the Düsseldorf Administrative Court ruled that the Bundeswehr's repayment claim is justified and that the former medical officer must repay 57,000 Euro to the Bundeswehr. The judges only agreed with the claimant on one point: the Bundeswehr must grant him a deferral or instalment payment of the sum (VerwG judgment of 14.1.2020, 10 K 15016/16).

The repaid training costs are deductible as income-related expenses because they are objectively related to the profession. The expenses are economically caused by both the previous and the new employment relationship. On the one hand, they are inextricably linked to the previous employment, as the payment would not be conceivable without the agreement with the former employer.

On the other hand, the expenses also find their economic cause in the new employment relationship, as the repayment obligation would not have arisen without the new contract (BFH judgment of 7.12.2005, I R 34/05).

Similar to an agreed repayment of training costs in the event of a breach of contract is the agreement of a contractual penalty. The contractual penalty may become due if the employment is terminated in breach of contract before the end of a commitment period. Payments to fulfil a contractual penalty are fully deductible as income-related expenses or business expenses without any ifs or buts. Where the deduction is made is actually irrelevant.

On the one hand, the contractual penalty may be related to the subsequent self-employed work because it enabled this work in the first place. On the other hand, it may also be primarily caused by the fact that the former non-self-employed work was not continued in accordance with the contract. In this case, the payment would be considered as subsequent income-related expenses (BFH judgment of 22.6.2006, BStBl. 2007 II p. 4).

(2022): Reimbursement of training costs are deductible as income-related expenses

Which training costs can I deduct?

You can deduct all costs incurred in connection with your training as training expenses. This includes in particular participation fees and learning materials.

You can deduct the following as participation fees:

• School fees,
• Fees,
• Course,
• Class, seminar fees,
• Admission and examination fees.

You can deduct these fees in full. If you purchase items for the training, you can deduct them as work-related items. This includes, for example:

• Specialist literature (trade magazine, trade magazines, professional journal, professional journals),
• Stationery,
• Briefcase,
• Computer,
• Desk,
• Desk lamp,
• Bookshelf,
• Dictation machine,
• Work clothing (lab coat).

Please note that you may only use these learning materials within the scope of the training; private use is not permitted.

You can also deduct your travel expenses. You can apply the travel allowance (0.30 Euro per kilometre driven) or the actual car costs.

You can also declare meal allowances and overnight accommodation costs in your tax return.

In addition, you can declare so-called incidental travel expenses in your tax return. These include, for example:

• Parking fees,
• Costs for luggage storage,
• Costs of a car accident on a journey related to the training,
• but also the material costs for a masterpiece or journeyman's piece in the craft sector or
• Interest on loans for financing the training.

In our opinion, the new home office allowance of 5 Euro per day (max. 600 Euro) is also available to those who are studying, training or furthering their education and are currently learning more at their home PC than in lectures or classroom-based courses.

(2022): Which training costs can I deduct?

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

Kosten für training or further training can be deductible as income-related expenses, business expenses, or special expenses. Expenses for initial vocational training outside of a training service 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 are deductible as income-related expenses or as pre-employment expenses without limit. This also applies to new vocational training after completing an initial training, as well as vocational training within a training service relationship, e.g. apprenticeship, traineeship. Important items include travel, meals, accommodation, and incidental travel expenses.

If, as an employee, you 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 individuals who continue their education or training alongside their job in the evenings and at weekends. This has been the case in the past 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 9.2.2012, 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.

This is the case if it is vocational training and you are not engaged in any employment alongside it. However, the following are permissible:

• employment up to 20 hours per week,
• marginal employment (mini-job), or
• short-term employment (temporary job).

Currently, the Lower Saxony Finance Court has ruled against the tax authorities that part-time study is not a full-time training measure because part-time study is not designed for the student to devote themselves fully to it. Rather, part-time study (here: according to the description of the Fernuniversität Hagen) is designed to be pursued alongside employment. "The understanding of the Federal Ministry of Finance, according to which a course of study or training measure is always a full-time study or full-time training measure in the event of unemployment, cannot be derived from § 9 Abs. 4 Satz 8 EStG" (Lower Saxony Finance Court of 16.2.2022, 4 K 113/20).

(2022): What can I deduct for full-time training or education?

How are study costs recognised?

Expenses for a first degree after completing secondary education are currently only deductible as special expenses up to a limit of 6,000 Euro, whereas the costs for a second degree or a first degree following vocational training can be fully considered as business expenses.

The deduction for special expenses only reduces tax if there are other incomes - including those of the spouse - from which the expenses can be deducted. If this is not the case, the supposed tax benefit is ineffective. Any training costs that cannot be offset against income in the year of payment are lost for tax purposes.

The Federal Constitutional Court has declared the legal regulation to be constitutional. The fact that expenses for initial vocational training or a first degree cannot be deducted as business expenses does not violate the Basic Law (BVerfG decision of 19.11.2019, 2 BvL 22/14, 2 BvL 23/14, 2 BvL 24/14, 2 BvL 25/14, 2 BvL 26/14, 2 BvL 27/14, published on 10.1.2020).

(2022): How are study costs recognised?

Can I deduct travel expenses for training?

If you participate in professional training, you can claim the travel expenses for tax purposes. In this case, the travel expenses are fully deductible. Unlike the commuter allowance, you can claim 30 cents per kilometre driven.

To record the travel expenses (0.30 Euro per kilometre driven), simply create an entry on the "Training costs" page: "Travel expenses: X km on Y days". Enter the result of your own calculation as the amount, e.g. Travel expenses: 70 km on 5 days >>> 70 km x 0.30 Euro/km x 5 days = 105.00 Euro = deductible travel expenses.

(2022): Can I deduct travel expenses for training?

When are language courses tax-deductible?

Expenses for a language course are tax-deductible as business expenses if you specifically need the language skills for your job or if you are planning a career change and the new job requires knowledge of a foreign language.

A professional reason exists if you work in a field with international contacts, frequently go on business trips abroad, use the foreign language as a working language, etc.

If the language course takes place abroad, you can also deduct the costs for tax purposes if there is sufficient professional reason. This applies not only to intensive courses but also to courses that provide only basic or general knowledge of a foreign language. Learning the general conversational language can also be professionally motivated if it is sufficient for your job.

In addition to seminar costs, course fees and examination fees, travel expenses, meal allowances, accommodation costs if applicable, expenses for literature, learning software, etc. are also tax-deductible as business expenses.

Tip: The new home office allowance of 5 Euro per day (max. 600 Euro) in 2020 and 2021 is also available to those who are studying, training or furthering their education and are currently learning more at their home PC than in lectures or classroom-based courses.

(2022): When are language courses tax-deductible?

Should the professional expenses be reduced by the master's bonus?

Training to become a master craftsman is expensive, and the expenses are tax-deductible as business expenses. Some federal states have been paying a master craftsman bonus for some time to emphasise the equivalence of vocational and general education. The aim is to create an incentive to pursue further vocational training and strengthen one's qualifications. However, the question is whether the business expenses must be reduced by the bonus.

In Bavaria, since 1 September 2013, every successful graduate of vocational training to become a master craftsman or equivalent qualification has received a master craftsman bonus of 1.000 Euro. The relevant directive is valid until 31 December 2016.

In Saxony, the master craftsman bonus programme was also adopted, whereby from 1 September 2016, at master craftsman celebrations, master craftsmen in trades, industry, and specialist fields not only receive their master craftsman certificates but also a bonus of 1.000 Euro. In Rhineland-Palatinate, the SPD has included the introduction of a master craftsman bonus in its government programme, and the state of Mecklenburg-Western Pomerania has been honouring the successful completion of master craftsmen in trades and industry with a master's extra of 1.000 Euro since 1 January 2016.

The Munich Tax Court has ruled that the training costs for the master craftsman examination, which are deductible as business expenses, do not have to be reduced by the master craftsman bonus paid out. The bonus is not taxable income, is not associated with a type of income, and is not linked to earning income. Therefore, it is not a tax-free scholarship according to § 3 No. 44 EStG or educational funding according to § 3 No. 11 EStG. The master craftsman bonus is paid not because of the expenses but solely because of the successful completion (FG Munich of 30 May 2016, 15 K 474/16).

The tax authorities accept the decision of the tax court and leave the master craftsman bonus not only tax-free but also non-deductible for business expenses (Bavarian State Office for Taxes of 6 July 2016, S 2324.2.1-262/6 St32). In Saxony and Mecklenburg-Western Pomerania, reference should be made to the BayLfSt ruling in comparable cases, as the master bonus or master's extra pursues the same objectives as the bonus in Bavaria.

Current: Under the Upgrading Training Assistance Act (AFBG), those preparing for a training qualification as a master craftsman in trades and industry, educator, technician, business administrator, or one of more than 700 comparable qualifications are supported (so-called Meister-BAföG). The funding includes grants that do not have to be repaid, as well as low-interest loans. If you take out a loan for training, you can claim the interest as business expenses for tax purposes. What happens if the loan is partially waived after passing the exam (according to § 13b para. 1 AFBG)?

Current The Lower Saxony Tax Court has ruled that the loan waiver is not income and therefore remains tax-free. Since the loan agreement is with the bank - Kreditanstalt für Wiederaufbau - the payment is not to be treated as an employer benefit for tax purposes. Therefore, the loan waiver is not related to the employment relationship (FG Lower Saxony of 31 March 2021,14 K 47/20, appeal VI R 9/21).

The case: An employee takes out a KfW loan for her training as an industrial supervisor under the Upgrading Training Assistance Act. The loan agreement states that 50% of the loan will be waived if the exam is passed. After passing the exam, the tax office levied income tax on the waiver. The reason given was that the waiver replaced the business expenses and had to be taxed as income from employment. The tax court ruled in favour of the employee. The judges saw no income and left the loan waiver tax-free.

(2022): Should the professional expenses be reduced by the master's bonus?

When are personality development courses recognised?

Courses aimed at personal development not only impart professional knowledge but also skills useful for personal growth.

In such cases, tax offices often do not recognise the costs as business expenses.

However, the tax office must accept such courses and seminars, from which you personally benefit, in the following cases:

• The course must be primarily tailored to the specific needs of the profession.
• The group of participants must be homogeneous, i.e. the course participants must have similar professional interests due to the nature of their work.

It is not necessary for all participants to belong to the same professional group. What matters is that the course participants have similar professional interests due to the nature of their work.

The group of participants is therefore also considered homogeneous if the participants belong to different professional groups but hold management positions in their respective fields and are interested in the courses and seminars due to these leadership roles (BFH rulings of 28.8.2008, BStBl. 2009 II p. 106 and 108).

Participation in seminars mainly aimed at personal development is considered predominantly private. Consequently, the seminar fees are not deductible as business expenses or business-related expenses. The Düsseldorf Finance Court recently ruled in this sense (judgment of 15.12.2021, 10 K 2085/17 E). Previously, the Thuringia Finance Court had similarly denied the deduction of costs in a similar case (judgment of 13.11.2019, 3 K 106/19).

The Düsseldorf judges' ruling was based on the following facts: The claimant, a prospective self-employed IT consultant, attended the seminar "The Millionaire Mind Intensive" with the modules "Guerilla Business Intensive", "Train the Trainer", "Never work again", "Freedom Trader Intensive" and "Enlightened Warrior".

The events were intended to show participants ways to become more financially successful in life. The module "Never work again" taught how to replace income from active work with passive income. The seminar and ancillary costs amounted to over 20.000 Euro.

According to the judges, the expenses are not deductible as business expenses or business-related expenses because there is no sufficient connection between the seminar content and the subsequent consultancy work. Rather, the seminars attended were essentially events aimed exclusively or at least partly at changing one's own views and attitudes.

(2022): When are personality development courses recognised?

Does attending an art exhibition count as training?

Attending cultural events such as concerts, theatre performances, museums, readings, etc., promotes general education and is therefore generally considered part of private life. This applies even if such visits are useful and beneficial for your profession (BFH ruling of 8.2.1971, BStBl. 1971 II p. 368).

Recently, the Baden-Württemberg Finance Court ruled that for an art teacher, the costs of visiting art exhibitions and private views cannot be deducted as business expenses, even partially. These are cultural events and participation in social life, similar to attending concerts or theatre and cinema performances, which are attended by a broad interested public and therefore not considered for tax purposes. There was no almost exclusive professional reason that would justify deviating from this principle. Partial consideration as business expenses is also excluded because it is not possible to divide them into professional and private parts due to a lack of objective criteria (FG Baden-Württemberg of 19.2.2016, 13 K 2981/13).

The case: A senior teacher teaches art at a grammar school. She has also been working as a freelance artist for many years. The claimant has so far only incurred losses from her work as an artist, which were not considered for tax purposes due to a lack of profit-making intent (so-called hobby). In the years in question, the teacher attended various art exhibitions and private views where artists exhibited their works and new developments and techniques in the field of art were presented.

She claimed 50% of the costs for attending the events (art club fees, entrance fees, travel expenses and parking fees) as business expenses for income from employment. Both the tax office and the finance court rejected the recognition of the costs as unfounded.

Only in exceptional cases can such expenses for attending cultural events be deductible as business expenses if they are "expressly aimed at the purpose of further training in their nature and design" (BFH ruling of 8.2.1971, BStBl. 1971 II p. 368).

(2022): Does attending an art exhibition count as training?