An educational institution attended outside of an employment relationship for the purpose of full-time studies or a full-time educational measure also qualifies as a first place of work (§ 9 Abs. 4 S. 8 EStG). However, the question arises whether, in the case of a distance learning program, the distance learning university can likewise be regarded as a first place of work — particularly when the studies are not pursued on a full-time basis.
Tax Authority View: Full-Time Studies
According to a BMF letter from 2020, full-time studies exist where the studies serve to prepare for a professional occupation and, alongside the studies, no further activity is pursued or, on average, only an activity of up to 20 hours per week. In addition, marginal employment within the meaning of the German Social Code is also permissible.
Lower Saxony Tax Court: Dispute Concerning Part-Time Distance Learning
In the year in dispute, the plaintiff completed a part-time distance learning program. He did not pursue any gainful activity alongside his studies. In his tax return, the plaintiff claimed the travel costs to the location of the educational institution in their full amount. In his view, the distance learning university did not constitute his first place of work, and the travel costs could therefore be claimed in full. The tax office, however, rejected this position and reduced the travel costs to the commuter allowance (Entfernungspauschale). The plaintiff then filed an objection against the tax office's decision, arguing that he completed his studies from home and only visited the distance learning university for exams and study groups with fellow students. Accordingly, in his view, this did not constitute full-time studies.
Decision of the Lower Saxony Tax Court
The Lower Saxony Tax Court ruled that, in the case at hand, the distance learning university did not constitute the taxpayer's first place of work. The reasoning was that, for the commuter allowance under § 9 Abs. 4 S. 8 EStG to apply, full-time studies or a full-time educational measure must be present. The basis for full-time studies or a full-time educational measure is a workload of 40 hours per week. This was not met in the case at hand, as the plaintiff was only pursuing part-time studies at the distance learning university. According to the distance learning university's own description, this involves a weekly workload of 20 hours. Furthermore, according to the BFH's definition, a full-time educational measure or full-time studies exist where the taxpayer must devote himself to them in full. In the case at hand, however, the part-time program was specifically designed so that the plaintiff did not have to dedicate himself to it in full. Consequently, the Lower Saxony Tax Court decided that the plaintiff's travel costs were not limited to the commuter allowance. An appeal proceeding regarding this dispute is currently pending before the BFH, so the final decision remains to be seen.
Frequently asked questions
Frequently asked questions
When does an educational institution qualify as a first place of work?
Under Section 9 (4) sentence 8 EStG, an educational institution qualifies as a first place of work (erste Tätigkeitsstätte) if it is attended outside of an employment relationship for the purpose of full-time studies or a full-time educational program. As a result, travel expenses are only deductible at the flat-rate distance allowance (Entfernungspauschale).
When does the tax authority consider studies to be full-time?
According to the BMF circular from 2020, full-time studies exist if the program serves to prepare for a profession and the student does not engage in gainful employment exceeding an average of 20 hours per week. Marginal employment within the meaning of the German Social Code is also permissible.
Is the distance-learning university the primary place of work in a part-time distance-learning programme?
According to the Lower Saxony Tax Court (Niedersächsisches FG), a distance-learning university does not qualify as the primary place of work in a pure part-time distance-learning programme. The court reasoned that full-time studies require a workload of roughly 40 hours per week, whereas part-time studies only involve about 20 hours per week. Travel expenses are therefore not limited to the standard commuting allowance (Entfernungspauschale).
Which travel expenses can be claimed for tax purposes in the case of part-time distance learning?
According to the Lower Saxony Fiscal Court, a distance learning university does not qualify as the primary place of activity in a part-time study program. Therefore, trips to the university can be claimed under travel expense principles, either with the actual costs or at 0.30 € per kilometer driven. The deduction is not limited to the commuter allowance (Entfernungspauschale).
How does the BFH define a full-time educational measure?
According to the BFH definition, a full-time educational measure or full-time course of study only exists if the taxpayer must devote themselves to it entirely. If a course of study is specifically designed to be completed alongside gainful employment or with reduced effort, this requirement is not met.
Has the legal question of distance learning as a primary place of activity been definitively resolved?
No, a final resolution is still pending. An appeal against the ruling of the Lower Saxony Tax Court is currently before the BFH, and its decision remains to be seen. Affected taxpayers should keep relevant tax assessments open where appropriate.