Federal decision: Are first-degree costs deductible as "Werbungskosten"?
⚖️ At the end of 2019, Germany’s Federal Constitutional Court issued a verdict on what first-degree study costs could be deducted. The court decided that all costs in the context of “initial education”, such as a Bachelor’s degree or an apprenticeship without any prior qualification, cannot be deducted as income-related expenses (Werbungskosten), but as special expenses (Sonderausgaben).
“Werbungskosten” & “Sonderausgaben” –
What's the difference?
If you’re a student and pursuing your first degreeThe first degree (apprenticeship or higher education) you are working towards after graduating from high school or secondary school.
Read more – so without a prior qualification – you can only deduct your study costs as special expensesIn contrast to income-related expenses, special expenses are various costs that are legally considered to be related to your private life management – for example pension expenses, health insurance, or …
Read more (Sonderausgaben). These types of deductions are limited to a maximum of €6,000 a year and only pay out when you actually earn taxable income (from a job or other source) for the year.
If you’re a student that already has a prior qualification – for example, second-degree studentsAny other degree (apprenticeship or higher education) that you are pursuing after finishing your primary degree (Erstausbildung).
Read more or Bachelor students who completed an apprenticeship before – you can deduct your study costs as income-related expensesAny expenses incurred in the acquisition, securing, and maintenance of income – meaning expenses directly connected with your work. They are deducted from your taxable income and therefore reduce your …
Read more (Werbungskosten). Income-related expenses can exceed €6,000 a year, and even if your expenses exceed your income, they give you the possibility to carry your expenses into future tax years as a loss carryforwardAlso known as loss carryover, a loss carryforward allows losses from one tax year to be carried forward into the following year(s). This can reduce taxable income, and therefore your …
Read more .
Key study costs you can deduct in your tax return
Semester & study fees
Semester and study fees are some of the biggest expenses that you have to face as a student. They often amount to several hundreds of euros per year and are usually due each half-year or semester. Some colleges and universities may charge monthly fees instead. Additionally, many libraries charge user fees; these are also deductible as tuition fees.
Course & exam fees
In some cases, you might have to pay upfront for courses or exams. Costs for language classes can also add up quickly. Throughout the course of your studies, fees will continue to accumulate. But the good news is that you can utilize these costs to claim some tax relief further down the line!
Depending on your study program, you might have varying expenses for specialized subject literature – which are deductible. You can also deduct the costs of exercise sheets and other educational or teaching materials, in addition to your books.
- Writing paper
- Printing paper
- Ink cartridges
- Binders & folders
- Your stapler
- Copy costs
Over time, these small expenses for writing materials can really add up! The total after just one year of studying can be quite impressive – and is deductible as well.
Computer or Laptop
In modern-day libraries and lecture halls, there’s always a sea of laptops and PCs. Many students also own their own outboard gear like scanners or printers. Fortunately, expenses for computers and computer accessories are deductible as study costs.
Travel expenses to your university
If you have to commute between your home and your university, these rides are considered travel costs. These deductible costs can also include visits to specialized libraries that require extended travel. You can deduct 30 cents per kilometer driven one-way.
Are you in a dual study program? Then you can only deduct the way to your employer as a commuter allowance instead.
You can deduct set lump sums for additional subsistence in the case of longer stays in out-of-town libraries or student excursions. You may even be able to claim accommodation expenses (Verpflegungsmehraufwand & Übernachtungskosten). ⬇️
First degree: During a first-degree education, you can deduct your rent as special expenses (Sonderausgaben). The requirements mentioned below regarding a secondary residence do not apply.
Second degree: If your student apartment is your secondary residence (Zweitwohnsitz), you can deduct its entire rent as study costs / Werbungskosten.
You can also deduct journeys between your student apartment and your main place of residence (e.g., your parents’ house) as home journeys; at 30 cents per kilometer, both ways!
Many students rely on additional support to cover study costs. If your parents cannot fully support you, it’s common to get a BAföG (federal financial aid) – or a student loan. If you have to repay these loans, it’s possible to save some money by deducting your tax return’s accumulated annual interest.
Graduating typically involves some sort of final exam or thesis (Abschlussarbeit) – often in the form of a written paper. As a student, this task allows you to use and prove the academic skills you’ve acquired during the course of your studies. Printing costs, as well as expenses for binding your thesis – whether Bachelor, Master, Diploma, or Ph.D. – are all deductible study costs.
Are you a member of an alumni union or a fraternity? Membership fees can be stated in your tax declaration as well.
As you can see, there are many different study costs you may be able to deduct in your tax return. Understanding these and then tracking your expenses accordingly can really pay off.
You now know how to file your declaration successfully to claim back money via your tax return. The average tax refund is €1,051 per tax year and the German tax law allows you to file for up to four years (!) retroactively!
And in case you have any questions about the filing process with Taxfix, we’re here to help. Get in touch under [email protected]!