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:
- a state or local government educational establishment;
- a university in public law;
- 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
- a 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).
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. Expenses paid for studies at a hobby centre can be deducted only if a person studying at a hobby centre is below 18 years of age on 1 January of the calendar year of the payment of the training expenses. For example, if a student was 17 years old on 1 January 2019, and on 1 March he or she turned 18 years old, then for this student the full amount of training expenses paid to the hobby centre in 2019 can be declared.
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 only income for a person is the taxable dividend by the tax rate 20/80 at the level of an Estonian company (reflected in table 7.1), then the person has no taxable income wherefrom to deduct the training expenses. The dividend regularly paid by a company wherefrom the income tax of 7 per cent has been withheld (reflected in the first part of table 5.1) shall be deemed to be the taxable income and on declaring such a dividend the training expenses may be deducted.
The training expenses cannot be deducted from income on account of a 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. Also, it is not allowed to declare the cost of a child's sport or other hobby training if a local government has reimbursed that cost to the parent.
The amounts paid separately for various training aids (stationery goods, exercise-books, books, dictionaries, etc.) cannot be deducted from the taxable income.
A person whose training expenses exceed his or her taxable income or the limit of the deduction (1200 euros, including the housing loan interest, and gifts and donations) may transfer the unused part of the training expenses deductions remaining to his or her spouse.
The unused part of training expenses (remaining balance) can be transferred to the spouse if the couple were married at the end of the calendar year.
If the spouse has sufficient taxable income, he or she can deduct the remaining balance from his or her taxable income. The person does not need to calculate the balance of the training expenses himself or herself. When submitting the income tax return in the e-MTA, the remaining balance of the training expenses will be displayed during the tax calculation, and if a balance occurs, a person can fill to his or her income tax return the spouse's data to whom the remaining balance will be transferred.
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, table 9.6.
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 Estonian Tax and Customs Board 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.
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.