Employee loans for further education
December 20, 2021 | 80,00 EUR | answered by Steuerberater Knut Christiansen
Dear Sir or Madam,
We are a non-profit organization (according to § 52 II 1 No. 2 and 13 AO) and we are solely funded by donations. We have a part-time position for accounting and administrative tasks, among others. We would like to provide this person with further training in the field of data protection law so that they can work in this area for the organization. The procedure should be as follows:
The costs of the training should be split equally between the organization and the individual. The full course fee should initially be paid by the organization. Through an employer loan, the individual should repay their share in monthly installments over 18 months. All parties agree to this approach. The amount to be paid by the employee (loan) is approximately 1,200 euros.
The question is: Is this approach, as proposed, generally possible without jeopardizing the tax exemption? Is it correct that a market-based interest rate is not necessary due to the low amount of the loan?
Thank you for your response.
Good evening and thank you for using frag-einen.com!
In principle, the procedure is possible because the further education benefits the association and does not exclusively favor the individual in question. In case of doubt, this is also taken into account with cost sharing.
When granting loans to employees of the association (as an employer), a waiver of interest is not harmful to tax exemption if the waiver can be considered as additional income. This means that the interest must be treated as taxable income subject to income tax and social security contributions. Interest benefits received by the employee through employer loans are non-cash benefits. They are to be taxed as such if the sum of the outstanding loans at the end of the payroll period exceeds 2,600 EUR. Since the loan amount here is below 2,600 EUR, no taxable benefit needs to be reported.
I hope this answers your question, otherwise feel free to ask for further clarification.
I would like to point out that this forum cannot replace comprehensive and personalized tax advice, but is mainly intended to provide an initial tax assessment. By adding or omitting relevant information, the legal assessment of your issue could be different.
Best regards!
Knut Christiansen
Tax Advisor
