In 2017, there were once again over 250,000 students in the Netherlands. Every student incurs costs whilst studying. When you are studying, there are two possibilities: either you are entitled to student finance and actually receive it, or you are not entitled to student finance. In some cases, the costs of a degree or course are tax-deductible on your income tax return.
ELIGIBLE for student finance
From 1 July 2015, the costs of studying are no longer tax-deductible if you are entitled to student finance. This applies even if you do not make use of your student finance. Therefore, for the 2017 income tax return, it is not possible to claim these costs as a deduction.
Incidentally, student finance is not counted as part of your income.
Does the merit-based grant remain a loan because you did not obtain a qualification within 10 years, or did you take out a supplementary loan? In that case, you may declare the debt in box 3. This only makes sense if your assets exceed the exempt amount (in 2017: €25,000). You can obtain an annual statement showing the amount of the debt as at 1 January 2017 from DUO retrieve.
NOT entitled to student finance
If you are not entitled to student finance, certain education-related expenses paid by you or your tax partner are tax-deductible. However, the costs incurred in order to undertake a course or study programme must be directly related to your (future) job.
Tuition fees
‘Deductible study costs’ are defined as:
- tuition fees, course fees, university fees and examination fees or PhD costs;
- teaching materials and protective equipment required by the educational institution (recommended reading is included in this, according to Court of Appeal of The Hague, not included);
- costs for EVC-procedures;
- depreciation of durable goods.
Depreciation on durable goods is only deductible if the item was purchased for the purposes of study or training and would not have been purchased had the course or study not been undertaken. Additional costs arising from personal preference are not deductible. Computer equipment is not classified as educational expenditure.
Travel expenses are also not included in the deductible study costs. These costs may be deducted from your income via the travel allowance.
Threshold
A threshold applies to the deduction of education expenses. To the extent that the total amount of deductible education costs exceeds €250, it may be claimed as a deduction in the tax return. In addition, a maximum of €15,000 is deductible for costs incurred outside the standard period of study.
Entrepreneurs
For business owners, the costs of training and courses may be deducted from profits as business expenses. However, this must relate to maintaining existing knowledge and skills. The costs of a course or training programme aimed at expanding the entrepreneur’s knowledge and/or the business’s activities cannot be deducted from the business’s profits. In such cases, you must claim the deduction described above as training expenses.
For costs charged to profit, business owners do not need to take the threshold for training expenses into account. However, these costs do fall under the category of partially deductible expenses, whereby it is assumed that, for 20%, there is a private element in the costs. This part of the costs is not deductible.
Employees
Employees may be reimbursed for the costs of study and training on a tax-free basis. These tax-free reimbursable costs also include travel expenses, subject, of course, to a maximum of €0.19 per kilometre.
Are you a director and major shareholder? If so, for tax purposes you are not considered an entrepreneur, but an employee of your own private limited company.