Allowances for Education

Measures aiding education are meant to increase both the professional qualifications of employees and their job security.

• Entrepreneurs who invest in the education of their employees can, under certain circumstances, claim an educational allowance (§ 4 Abs. 4 Z 8 EStG) of up to 20 percent (from 2002), if the education takes place through a company-external contractor.
  The allowance can be taken into account on or off the balance sheet. From the 2005 tax assessment onwards the indication of the allowance at its designated area of the tax assessment is a requirement for its being taken advantage of. However, an adjustment of incorrect or neglected records is possible until the tax assessment is legally valid.
• As an alternative to the educational allowance, entrepreneurs can request an educational bonus (credited to the tax account) to the amount of 6% of the basic educational allowance (§ 108c EStG). The educational bonus will be validated in an attachment to the tax assessment (Form E 108c), this can also be handed in until the takers' assessment becomes legally valid.  Beginning with February 2006 these bonuses cannot be claimed before expiration of the respective fiscal year.
• Employees can also file for tax refunds on educational programs in conjunction with the executed or cognate task as well as for reeducation measures, citing them as income-related expenses (§ 16 Abs. 1 Z 10 EStG).   

If in doubt, we recommend to consult an appropriate tax consultant, tax and revenue office or employment centre.