Tax deduction for study expenditure

In September our kids go back to school and it makes us think to take up studies ourselves. But are these study costs professional expenditure? Can you follow whatever course? We find it out.

Basic rule

For study expenditure the general principle for professional expenditure applies: costs are deductible when they are made to obtain or to keep taxable income (art. 49 WIB 1992).

The tax authorities state that study expenditure is tax deductible when it relates to the professional activity of the tax payer at the time of the study and is necessary for the practice of his profession, whether immediately or in the future. Study expenditure not relating to the professional activity at the time of the study is not tax deductible.

If you want to practice a new professional activity and therefore follow a study, these costs are not tax deductible.

Necessary relation with the professional activity

It is not always clear to determine whether or not study expenditure relates to the professional activity. The courts have decided many cases, both in favor and against the tax payer.

Sometimes the tax authorities argue that study expenditure is only tax deductible in case that without this expenditure there would be no extra taxable income. However this condition is an opportunity decision and courts and jurisprudence decide against it. For the courts it suffice that there is a link between the study expenditure and the taxable income.

A bookkeeper can therefore deduct the study expenditure for his extra study in accounting  and tax since this study increases his technical knowledge and helps him in his professional activity and because he can obtain with this knowledge his accountant certificate (Bergen, 4 February 1994).
An unemployed certified (cargo) pilot who never practiced this profession cannot deduct the study expenditure to become an airline pilot, since this gives him access to a new profession (Rb. Gent, 8 May 2003).

And for language courses?

In general the costs for a language course are not tax deductible. These costs only qualify as professional expenditure to the extent that there is a direct link with the professional activity practiced at the time of the language course. Extra condition is that the study is necessary due to the technical evolution and methods proper to the profession. In case you have frequent contact with foreign customers, it is at least defendable to deduct the expenditure of a “Business English” course.

Congress and seminar expenditure abroad

Foreign study trips whether or not combined with attending a congress are generally accepted as professional expenditure by the courts provided that there is a direct link with the professional activity and the study trip can be considered to further qualify the concerned person.

When the costs for attending a congress are a part of a total travel program, the tax deduction is limited to the part relating to the congress.

When you want to follow a seminar in an exclusive and idyllic holiday resort, you should follow some guidelines if you want to deduct these costs:

the professional nature of these costs will be verified in detail, the costs should not unreasonably exceed the professional needs;

the following costs are never deductible: travel and accommodation expenditure of the husband or wife (or partner) of the tax payer, costs for relaxing, touristic and gastronomic activities during the trip and excessive hotel and restaurant expenditure of the tax payer;

costs for pleasure trips or facility trips which are presented as study trips are always rejected.