Reimbursement of the employer – Continuing education – Further education – Tax consultant – Hagen – Holzwickede – Kamen – Lünen

Reimbursements by the employer: Expenses for initial training are regularly costs of private living and can only be taken into account (to a limited extent) within the framework of special expenses. If, on the other hand, an employee pursues further training in an already learned profession or retraining in preparation for a change of profession, the corresponding expenses are generally deductible as income-related expenses.

If an employer provides subsidies for a vocational training or continuing education measure of the employee, these reimbursements remain exempt from wage tax and social security contributions if the training measure is carried out in the very predominant operational interest of the employer. It should be noted, however, that cost transfers that are contingent on passing the exam can be harmful.

The tax authorities are of the opinion that in this case the employer’s benefit is not an assumption of costs agreed from the outset, but rather a type of “bonus”. Since the subsequent payment is made (only) subject to passing the examination, there is taxable income in this respect. In the example case, the payment of 5,000 euros in 2017 therefore increases the salary subject to wage tax and social security contributions; the deduction of income-related expenses for the years 2015 to 2017 is retained.

(For more comments & information on this, please see our Information Letter 03/2018).