Are tuition fees for a private university of applied sciences tax-deductible?

If your child, for whom you receive child benefit or a child allowance, attends a fee-paying private school, you can partially deduct the school fees as special expenses: 30 percent, up to a maximum of 5,000 Euro, are deductible. Eligible are schools and institutions that lead to a recognised general or vocational school, year group, or professional qualification (§ 10 para. 1 no. 9 EStG). The question is whether state-recognised private universities and colleges are also eligible.

Currently, the Münster Finance Court has ruled that tuition fees for a private university of applied sciences are not recognised as school fees for tax purposes, because private universities whose state recognition is based solely on the provisions of the respective state higher education law are not considered "schools" within the meaning of § 10 para. 1 no. 9 EStG.

The case: The claimant's daughter has been studying as part of a bachelor's degree programme since October 2013 after completing her A-levels. In the income tax return for the year in question, the claimant claimed fees of 3,555 Euro paid by him for the winter semester 2013/2014 as special expenses under § 10 para. 1 no. 9 EStG. The tax office rejected the deduction of special expenses in the income tax assessment.

According to the judges, courses of study at a university of applied sciences do not lead to a "general education" school, year group, or professional qualification. Nor is a "vocational" qualification awarded, as a "Bachelor of Science" is conferred upon successful completion of the course. This is not a job title but an academic degree (FG Münster of 14.8.2015, 4 K 1563/15 E).

Are tuition fees for a private university of applied sciences tax-deductible?

When can I deduct school fees?

If your child attends a private or predominantly privately funded school, you may be able to deduct part of your costs from your taxes. The special expenses deduction for school fees is 30 percent of the costs, but no more than 5,000 Euro per child.

The amount is granted only once for each child and each parent couple. For unmarried parents, each parent is entitled to half the amount. However, the parents can apply for a different distribution.

To claim school fees as special expenses, you must have a claim to child benefit or the child allowance for the child. Eligible institutions are those that prepare for a recognised school, year group, or professional qualification. This includes not only schools in Germany but also those in other EU countries and German schools worldwide.

You cannot deduct expenses for individual private lessons or tutoring for your child. Also, costs for accommodation, care, and meals cannot be claimed as special expenses. The same applies to travel expenses, costs for school books, holiday courses, or sportswear.

You must prove to the tax office that all conditions for the school fee deduction are met (amount of the fee, recognition of the educational qualification). The school's certificate should list the eligible school fees separately from other costs.

You can only claim school fees as special expenses if you are fully taxable in Germany. This also applies if you live abroad and are treated as fully taxable in Germany upon request. If you are only partially taxable in Germany, a special expenses deduction is not possible.

When can I deduct school fees?

Which schools are eligible schools?

Eligible schools include private schools or predominantly privately funded schools that lead to a general or vocational school or professional qualification. The qualification must be recognised by the state ministry, the Standing Conference of the Ministers of Education and Cultural Affairs, or the certificate recognition office. This also includes attending educational institutions that prepare for a school, year group, or professional qualification. It is crucial that the schools follow a state-prescribed, approved, or supervised curriculum.

Also eligible are

• Schools in EU/EEA countries; Switzerland is not included,
• Schools in a country outside the EU/EEA, provided the school has been recognised by the Standing Conference of the Ministers of Education and Cultural Affairs (so-called German schools abroad).

The EEA includes the EU countries as well as Iceland, Liechtenstein, and Norway. Note: Switzerland is neither an EU member nor part of the EEA. School fees for a private school in Switzerland cannot be deducted as special expenses because Switzerland is not an EU or EEA member state. The free movement agreement does not apply here (BFH ruling of 9.5.2012, X R 3/11).

Universities or colleges are not considered eligible schools. Therefore, tuition fees at a university cannot be claimed as special expenses.

Enquire with the school or relevant authorities whether a school is one of the eligible institutions. Information is provided, for example, by the relevant state school and cultural ministries, the Standing Conference of the Ministers of Education and Cultural Affairs, or the domestic certificate recognition offices. The tax office is bound by the decision of these institutions.

Which schools are eligible schools?

How much school fees can I deduct?

If your child attends a private or predominantly privately funded school, you can deduct 30 per cent of the school fees, but no more than 5,000 Euro per child, as special expenses for tax purposes.

This maximum amount applies per child and is granted to each pair of parents only once. The costs are taken into account for the parent who paid them. If the parents paid the school fees jointly, each can claim costs up to half the maximum amount (2.500 Euro). However, you can agree on a different distribution with your spouse.

If you are not (or no longer) married to the other parent or are separated, you should consider the distribution carefully to maximise the deductible amount.

A child attends a private school that meets all the requirements for the school fee deduction. The mother and father are not married. The mother pays 1.000 Euro in school fees per year, the father 10.000 Euro. If both partners do not intervene in the distribution, the following picture emerges:

Mother: 30 per cent of 1.000 Euro = 300 Euro

Father: 30 per cent of 10.000 Euro = 3.000 Euro (maximum 2.500 Euro).

As a result, 500 Euro of the maximum amount is not used.

Here, the mother and father can agree to distribute the maximum amount differently, for example in proportion to their contributions. Then the father could deduct 30 per cent of 10.000 Euro = 3.000 Euro (maximum 4.545 Euro) and the mother 30 per cent of 1.000 Euro = 300 Euro (maximum 455 Euro). The joint maximum amount of 5.000 Euro is not exceeded.

How much school fees can I deduct?

Which costs cannot be deducted as school fees?

Not all costs can be claimed for tax purposes. For example, if your child attends a boarding school, the expenses for accommodation, care and meals for your child must be deducted. School clothing and travel to school are also not tax-deductible as school fees.

The same applies to learning materials, as well as school books or computers that you purchase yourself. Costs for additional courses or school trips cannot be included in the tax return either.

Finally, costs for individual private tuition, music schools, sports clubs, holiday courses and tutoring are not deductible.

Which costs cannot be deducted as school fees?