The legislator has now reaffirmed the long-standing prohibition on deducting costs of initial vocational training, which the BFH had generally upheld until 2011. In its judgment of 5 November 2013 (VIII R 22/12), the BFH ruled that expenses for a course of study constituting initial vocational training and not undertaken within an employment relationship cannot be deducted as anticipated business expenses. In this judgment, the BFH also clearly reaffirmed that a taxpayer's expenses for an initial vocational training, or for an initial course of study that simultaneously constitutes initial vocational training, are recognised neither as business expenses nor as income-related expenses. The rule applies to all assessment periods from 2004 onwards. The BFH takes the view that this provision violates neither the prohibition on retroactive legislation nor the principle of equality under Article 3 of the Grundgesetz (German Basic Law).
Frequently asked questions
Frequently asked questions
Are the costs of a first-time degree deductible as business expenses or income-related expenses?
No. Expenses for initial vocational training or a first-time degree that also constitutes an initial qualification are generally not deductible as business expenses or as income-related expenses. They may only be claimed as special expenses (Sonderausgaben) up to the statutory maximum amount.
Does the deduction prohibition also apply if the initial degree is not pursued within an employment relationship?
Yes. In its ruling of 05.11.2013 (VIII R 22/12), the BFH confirmed that costs for an initial degree not completed within an employment relationship cannot be deducted as anticipated business expenses. However, if the initial training takes place within an employment relationship, the deduction prohibition does not apply.
From which assessment period does the deduction ban for initial training costs apply?
The rule applies to all assessment periods from 2004 onwards. The BFH considers this to violate neither the constitutional prohibition of retroactivity nor the principle of equality under Art. 3 GG.
Does the retroactive deduction ban for initial vocational training costs violate the German Basic Law?
According to the BFH, it does not. The court has expressly ruled that the retroactive application from 2004 onwards violates neither the prohibition of retroactivity nor the principle of equality under Article 3 of the German Basic Law (Grundgesetz).