Legal framework
Parents may deduct 30% of the fees they pay for their children to attend a school operated by a private body (e.g. a foundation) or a predominantly privately financed school as special expenses (§ 10 Abs. 1 Nr. 9 S. 1 EStG). Fees for accommodation, supervision and meals are excluded. A further requirement for the deduction of school fees as special expenses is that the school is recognised by the relevant state ministry for the issuance of certificates (§ 10 Abs. 1 Nr. 9 S. 2 EStG).
The dispute
During the school year, the claimants paid a total of EUR 1,000 to the support association of the school operated by a private body (foundation) attended by their child. According to the foundation's articles, its purpose is to promote the education and upbringing provided by the school by financially supporting school trips, school facilities, projects and teaching materials.
The tax office did not recognise the payments as school fees deductible under § 10 Nr. 9 EStG. The reasoning was that the payments were not made exclusively for school attendance, but also for events, study trips, school camps, etc.
Ruling of the Münster Tax Court: Recognition as school fees
The Münster Tax Court nonetheless ruled that the payments to the support association were to be recognised as school fees within the meaning of the special expenses rules. The court reasoned that the term "fee" for school-related purposes is not specifically defined within the special expenses provisions, and therefore the designation "school fee" is not decisive. What is required is that the payments cover school costs which, at a state school, would be financed by public funds (e.g. teaching materials). Accordingly, payments made by parents to a support association that receives and passes them on to cover school-related costs also satisfy the definition of a fee.
A final decision in this dispute is still pending before the BFH.
Note:
Where a support association acts altruistically and is therefore recognised as a charitable organisation, payments made to it are of course acknowledged by way of a donation receipt and may be claimed as such in the income tax return. Only where the support association covers costs of school operations that are not publicly financed, or where the school is dependent on the contributions of the support association, the payment does not qualify as a donation but rather as consideration for services rendered.
Frequently asked questions
Frequently asked questions
To what extent is school tuition deductible as a special expense?
Parents may deduct 30% of the fees paid for their child's attendance at a school under independent sponsorship or a predominantly privately financed school as special expenses (§ 10 Abs. 1 Nr. 9 EStG). Fees for accommodation, supervision, and meals are excluded. A further requirement is that the school is recognized by the competent state ministry for the issuance of certificates.
Can payments to a school support association be deducted as tuition fees?
According to a ruling by the FG Münster (Münster Tax Court), payments to a school support association (Förderverein) can also qualify as tuition fees for the purpose of special expense deductions, provided that the funds cover school-related costs and are forwarded accordingly. The decisive factor is not the label "tuition fee" but whether the costs are school expenses that would otherwise be publicly funded at state schools. A final decision by the BFH is still pending.
Why did the tax office reject the deduction of donations to the school support association as tuition fees?
The tax office argued that the payments to the support association were not made exclusively for school attendance, but also covered events, study trips and school field trips. Such services were not covered by the tuition fee definition under § 10 Abs. 1 Nr. 9 EStG. The Finanzgericht Münster rejected this narrow interpretation.
When are payments to a school support association donations and when are they considered payment for services?
If the support association acts selflessly and is recognized as a non-profit organization, payments can be deducted as special expenses (Sonderausgaben) by means of a donation receipt. However, if the support association covers school operating costs that are not publicly funded, or if the school depends on these funds, the payment does not qualify as a donation but as a payment for services. In this case, only a deduction as school fees pursuant to § 10 Abs. 1 Nr. 9 EStG is possible.
Which schools qualify for the special expenses deduction for school fees?
Eligible schools include those under independent sponsorship, such as foundation schools, as well as predominantly privately funded schools. A key requirement is that the school is recognized by the competent state ministry to issue diplomas. Without this official state recognition, the special expenses deduction under § 10 Abs. 1 Nr. 9 EStG is not available.