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Training expenses in general

 

2016

A taxpayer may deduct from his or her taxable income the training expenses paid during the calendar year which incurred to this taxpayer and a child of under 26 years of age, grandchild, brother or sister, or, if no such training expenses were incurred, the training expenses of the permanent resident of Estonia of less than 26 years of age.

The training expenses may be deducted from income only if the expenses were paid for studying in:

  • state or local government educational establishment;
  • university in public law;
  • in a private school which has got in the framework of the study programme an activity licence or a registration entry in the Estonian Education Information System (EHIS) or the right to provide a higher education
    or
  • foreign educational establishment of equal status with the aforementioned, or for studying on fee-charging courses organised by such educational establishments.

Whether a school has a valid registration, and to which types of training (further education, in-service or hobby training) does the registration apply can be verified on the Estonian Education Information System (EHIS).

Since 2016 the expenses of motor vehicle driver training of categories AM, A and B, and subcategories A1, A2 and B1 are not deducted from taxable income. The expenses of hobby training of adults (persons aged 18 and above) are also no longer be deductible.

Upon payment of the training expenses please ensure that the person's name and ID code are made known to an educational institution. If the training expenses are paid for somebody else (e.g. for a child), please submit the trainee's (a person for whom the training expenses are paid) name and ID code and your own name and ID code. Provision of information on the person who paid the training expenses is relevant when the trainee did not have any income of his or her own wherefrom to deduct the training expenses.

The training expenses cannot be deducted in an amount bigger than the amount of taxable income. For example, if the dividends received from the Estonian companies were a person's only income, it would mean that this person has no taxable income wherefrom to deduct the training expenses.

Training expenses cannot be deducted from income on account of scholarship or grant which is exempt from income tax. For example, it is not allowed to deduct the training expenses paid for courses of the official language, if a stipend not subject to taxation is received as a compensation for courses or if the legal person has compensated the training expenses.

The amounts paid separately for various training aids (stationery goods, exercise-books, books, dictionaries, etc.) cannot be deducted from the taxable income.

Pre-completed data on training expenses

All educational institutions submit to the Estonian Tax and Customs Board by 1 February information on the training expenses paid by the persons to an educational institution during the previous year. The Estonian Tax and Customs Board enters the data on the training expenses on pre-completed income tax returns.

If a pre-completed tax return does not contain information on the training expenses or the data differ from the information known to the taxpayer, you should contact the educational institution and ask the institution to provide information to the Estonian Tax and Customs Board or to correct the data.

You may amend a pre-completed tax return yourself as well, but in this case the tax authority may request you to submit a document issued by the educational establishment on the payment of the training expenses.

The document issued by an educational institution on acknowledging receipt of the payment is not a proper certificate of training expenses.

Kindergarten fees

You can deduct also the fee for the kindergarten operating as an educational institution.

Food allowances are not the training expenses and cannot be deducted from income.

2015

A taxpayer may deduct from his or her taxable income the training expenses paid during the calendar year which incurred to this taxpayer and a child of under 26 years of age, grandchild, brother or sister, or, if no such training expenses were incurred, the training expenses of the permanent resident of Estonia of less than 26 years of age.

The training expenses may be deducted from income only if the expenses were paid for studying in:

  • state or local government educational establishment;
  • university in public law;
  • in a private school which has got in the framework of the study programme an education or activity licence or a registration entry in the Estonian Education Information System or the right to provide a higher education;
  • foreign educational establishment of equal status with the aforementioned, or for studying on fee-charging courses organised by such educational establishments.

The existence of a valid training licence or activity licence or registration may be checked through the Estonian Education Information System available on the web page of the Ministry of Education and Research.

Upon payment of the training expenses please ensure that the person's name and ID code are made known to an educational institution. If the training expenses are paid for somebody else (e.g. for a child), please submit the trainee's (a person for whom the training expenses are paid) name and ID code and your own name and ID code. Provision of information on the person who paid the training expenses is relevant when the trainee did not have any income of his or her own wherefrom to deduct the training expenses.

The training expenses cannot be deducted in an amount bigger than the amount of taxable income. For example, if the dividends received from the Estonian companies were a person's only income, it would mean that this person has no taxable income wherefrom to deduct the training expenses.

Training expenses cannot be deducted from income on account of scholarship or grant which is exempt from income tax. For example, it is not allowed to deduct the training expenses paid for courses of the official language, if a stipend not subject to taxation is received as a compensation for courses or if the legal person has compensated the training expenses.

The amounts paid separately for various training aids (stationery goods, exercise-books, books, dictionaries, etc.) cannot be deducted from the taxable income.

Pre-completed data on training expenses

All educational institutions, universities and schools submit to the Estonian Tax and Customs Board by 1 February information on the training expenses paid by the persons to an educational institution during the previous year. The Estonian Tax and Customs Board enters the data on the training expenses on pre-completed income tax returns.

If a pre-completed tax return does not contain information on the training expenses or the data differ from the information known to the taxpayer, you should contact the educational institution and ask the institution to provide information to the Estonian Tax and Customs Board or to correct the data.

You may amend a pre-completed tax return yourself as well, but in this case the tax authority may request you to submit a document issued by the educational establishment on the payment of the training expenses.

The document issued by an educational institution on acknowledging receipt of the payment is not a proper certificate of training expenses.

Kindergarten fees

You can deduct also the fee for the kindergarten operating as an educational institution.

If a kindergarten arranges some other training or educational activities or courses (for teaching foreign languages, swimming courses, etc.) and records it as the training expenses, then such amounts are also deemed to be the training expenses whereon the tax incentives are extended.

Food allowances are not the training expenses and cannot be deducted from income.

Driving school

The amounts paid for studying in a driving school holding an appropriate activity licence are deemed to be the training expenses that may be deducted from income.

However, the state fee paid for taking an exam is not a training expense.

 

 

13.01.2017