Germany: Tax treatment of costs incurred by employer for vocational training of employees – reversal of previous position

Posted on 10th January, 2009

Estimated reading time 2 minutes

Costs of training met by an employee will not form taxable salary for an employee provided certain conditions are met.

Where an employer pays the costs of vocational training for an employee, this does not constitute taxable salary of the employee, provided that the continuing education is predominantly in the interest of the employer.  This applies also to costs of training provided by third parties, who are chosen and paid for by the employer (R 19,7 Abs. 1 S. 1, 3 LStR).

Training will be in the interest of the employer even if the employee is the recipient of an invoice from the third party.

However, in order for the costs to be exempt from tax, in accordance with a regulation of the Regional Finance Office, it is a requirement that the employer promises to pay these costs before the employee concludes the contract with the third party.

In order to avoid an additional deduction of these costs within the employee’s personal tax declaration as costs of the job, the employer is obliged to note the amount of the reimbursement from the original invoice and to make a copy for the employee’s personal file.


This decision reverses the earlier position where when an employee had paid for training, the costs of which were subsequently reimbursed by the employer this constituted taxable salary for the employee.


Regional Finance Office Rheinland: Order dated 28 July 2009

For further information or to discuss the issues raised, please contact Joachim Menz ( on +49 89 24 22 30 0.

This article was produced by, and re-produced with kind permission of, our correspondent firm in Germany, Keller Menz Rechtsanwälte.

Keller Menz


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