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Deducting study costs in your Dutch tax return

Finsens, the financial planning experts for individuals, explain which study costs can be deducted in your annual Dutch income tax return.

In the Netherlands there are several personal deductions applicable to the annual income tax return (aangifte inkomstenbelasting). One of these deductions is for study costs.

In this article we discuss the possibility of deducting study costs by explaining the studies that qualify.

We then examine what can be classified as study costs, and inform you about the tax benefits that can be gained from deducting such costs in your tax return.

Which studies qualify as deductible?

Study costs can be interpreted relatively broadly. A study that enables a tax resident to obtain a better position on the labour market or to maintain his or her current work-related knowledge will qualify as study costs. Home studies without any guidance, however, will not qualify.

The study can be an (international) MBA, Master, Bachelor, MBO or personal development course (if it meets certain requirements).

Whether a course or study is deductible also depends on the job that it is supposed to develop. A course that is attended out of personal interest or as a hobby will not be taken into account if the tax resident cannot prove that the study was taken to improve professional skills.

Unfortunately, language courses such as Dutch or English are excluded as study costs.

What are study costs?

Besides the tuition fee, a participant is able to deduct costs for books and a computer. The computer can be depreciated to a maximum of 20 per cent per year.

Materials specifically required for study such as specialised software and equipment are also deductible. These materials must be used during the studies. Some non-deductible costs are travel expenses and accommodation.

Tax benefit of study costs

Study costs are a personal deduction and can be used when a tax resident has a taxable income in the Netherlands. The personal deduction can also be allocated to your tax partner.

If there is no taxable income, the personal deduction can be saved and used in subsequent years, although a tax resident must file a tax return for the relevant year to claim back the deduction.

The personal deduction will be deducted against a maximum tax rate of 52 per cent depending on the tax bracket that applies to your top income level. There is no limitation on the duration of the deduction.

Non-deductible study costs

In cases where a student receives a contribution from the government such as the prestatiebeurs (performance-based student financing), study costs are not deductible. The same applies in situations where study costs are reimbursed by your employer.

Maximum tax benefit

The maximum amount that can be deducted is 15.000 euros per year. For students younger than 30 and who are studying for less than five years, this maximum amount is not applicable. For all students a threshold of 250 euros applies.

Elisabeth Bouwer is a partner at Finsens, specialists in rendering services to expats in the areas of tax, mortgages and investment advice.

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Elisabeth

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Elisabeth Bouwer

Elisabeth Bouwer is a tax advisor at Broadstreet. She is specialized in international tax law concerning employees, directors and companies. Broadstreet is specialized in rendering services to expats in the...

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