Tax deduction of study tuition fees expenses. Dutch tax law offers an interesting benefit for students. College fees and costs for study literature are deductible in the year these costs have been made. There is a threshold (depending in which year the study costs were made) which varies between EUR 250 and EUR 500. Costs in excess of this threshold are deductible either without a maximum or with a maximum of EUR 15,000 per year. Whether or not there is a maximum depends on the age and study past of the student. The maximum applies when the student is at the age of 30 years or older and/or the student already spent more than five years studying. If a maximum applies, than planning is important. Be sure that not more than the maximum amount plus the threshold is paid in a single tax year as the excess will not lead to tax deduction. Often the Universities are open to discuss the payment terms. It may be worthwhile to e.g. pay a part upfront or to pay a part at a later moment, depending on the situation.
Please note the above only applies in case study expenses are borne by the students themselves, therefore the costs may not be covered by a study grant or paid through a gift from e.g. family. It is possible to deduct study costs financed by a loan which is to be repaid. In the case of a loan it is always best to put it on paper. A further important condition is that the study and the intention of the student qualifies as being a chance of obtaining a position on the labour market or to better the position at current employment. Costs made for a study which is followed as a hobby are not deductible.
In order to be able to deduct study costs a tax return is to be filed over the year in which costs were made. Even in a situation in which there were no taxable earnings during the year study costs were made, it is still interesting to file a tax return as a loss following from study expenses can be carried forward to a future tax year in which the student starts an employment and earns taxable wages and/or other income. We can assist with further advisory relating to study costs deduction as well as preparing the required tax returns.
Please feel free to contact Jan-Hein van Leeuwen for any questions you may have on this matter.