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 if absent for at least 8 hours, a meal allowance of 6 EUR can be claimed (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 (§ 9 para. 4 sentence 8 EStG). However, dual study always takes place within the framework of an employment or training relationship. What applies then?

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 travel 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 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 an employment training 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.

What can be deducted in a dual study programme?

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,
• Course, 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, trade journal, trade 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 home office allowance / daily allowance of 6 Euro per day (max. 1.260 Euro) is also available to those who are studying, training or furthering their education and learn more at home on their PC than in lectures or classroom instruction.

Which training costs can I deduct?

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 travelled.

To record the travel expenses (0.30 Euro per kilometre travelled), 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.

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 need the language skills specifically 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 foreign 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 only provide basic or general knowledge of a foreign language. Learning the general colloquial language can also be professionally motivated if it is sufficient for your work.

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 6 Euro per day (max. 1.260 Euro) is also available to those who are studying, training or furthering their education if they study at home and do not visit the educational institution or training location on that day.

When are language courses tax-deductible?

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

Costs for training or further education can be deductible as income-related expenses, business expenses, or special expenses. Expenses for initial vocational training outside of an employment training 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 an employment training relationship, e.g. apprenticeship, traineeship. Important items include travel, meals, accommodation, and incidental travel expenses.

If you, as an employee, participate in a training measure outside your company as part of your employment, this is considered an off-site activity. You can claim your expenses according to travel expense 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 people who continue their education or training alongside their job in the evenings and at weekends. This has been the case so far and continues to apply.

However, the situation is different if you undertake a full-time training course 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 expenses 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 para. 4 sentence 8 EStG" (Lower Saxony Finance Court of 16.2.2022, 4 K 113/20).

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).

How are study costs recognised?

When are personality development courses recognised?

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

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 practised.
• 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 that mainly serve personal development is considered predominantly private. Consequently, the seminar fees are not deductible as business expenses or professional 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 professional 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.

When are personality development courses recognised?