Administrative process regarding the deductibility of the thesis evaluation as advertising costs.
July 7, 2013 | 40,00 EUR | answered by StB Patrick Färber
Dear Sir or Madam,
I have been employed full-time in the state of Saxony since the beginning of 2012 (as a commercial officer in a company in the renewable energy sector).
I have completed a commercial profession and obtained a diploma in business administration (FH) from a university of applied sciences from 2002 to 2006.
Since the end of 2006, I have been enrolled in a second degree program (landscape planning) at a university in Brandenburg.
In 2011, I submitted my thesis as the final examination, which was rated as unsatisfactory. After a long back and forth between the university and myself, I hired a lawyer in October 2012 and a lawsuit has now been filed against the evaluation.
Can I claim the costs incurred by the lawyer and the court as advertising expenses? Or can I only claim them as miscellaneous expenses? How should I justify this?
There are many employees in my company who have a similar degree, and I need this, in addition to my first two qualifications, for further advancement in the company and the industry.
The competent court has now stated that the other party has been advised to evaluate my thesis positively. The chances of success are therefore high.
Specific costs that have been incurred so far:
Initial consultation: 200 €
Expert opinion by the lawyer: 2000 €
Interim and advance invoices (procedural and scheduling fees): 1500 €
Court costs: 400 €
This is an administrative legal dispute. I do not have legal expenses insurance.
Thank you!
Dear inquirer,
I would like to answer your inquiry based on the information provided, the rules of the forum, and within the scope of an initial consultation as follows:
According to your description, you are pursuing a second degree following the completion of a vocational training and a first degree.
According to legal rules, only so-called EDUCATION EXPENSES (i.e. first education/studies) are limited to the deduction for special expenses.
All subsequent professional development activities are referred to (especially in relation to the tax office) as PROFESSIONAL DEVELOPMENT EXPENSES. This category also includes costs for a second degree, which are generally deductible as EMPLOYMENT EXPENSES.
Now, there are 2 possibilities that are not explicitly clear from your description.
- During your studies in landscape planning, you had NO INCOME:
In this case, we argue that these costs are ANTICIPATED EMPLOYMENT EXPENSES, specifically in anticipation of your current job. If your landscape planning studies are directly related to a planned professional activity, then they meet this requirement. We would argue that the renewable energy industry is closely related to landscape planning and construction, as wind turbines need to be placed somewhere. Additionally, you can refer to other colleagues in the industry, as you mentioned.
Therefore, you can initially claim the costs of the second degree as anticipated employment expenses. However, you would only secure a loss (carryover) that you can then offset with your first earnings (in 2012). To do this, you must declare these costs in the N attachment and check the box on the main form for "Declaration of the remaining loss carryforward."
Now, moving on to your actual question: since these costs were incurred to complete your second degree, you should also be able to claim them in your tax return as (anticipated) employment expenses, as there is a clear connection to the second degree and future earnings.
- During your studies, you had other income (e.g. from employment or other sources):
Same as above, except that the "anticipated" employment expenses would directly reduce these earnings in the respective year and be offset accordingly. An "isolated" carryover of the employment expense surplus to 2012 with existing other income (except for capital gains) is not possible.
The deductibility of legal and other costs remains unchanged.
In summary, in your tax return, you should definitely declare these costs as PROFESSIONAL DEVELOPMENT EXPENSES and (possibly anticipated) employment expenses by demonstrating a specific connection to the planned professional activity. In my opinion, this should be feasible in the fields of "landscape planning" and "renewable energy."
I hope I was able to comprehensively answer your question and explain the connections.
Have a great evening,
Patrick Färber
Tax Advisor
patrickfaerber@arcor.de
