How to include postgraduate studies in tax deductible costs?

How to include postgraduate studies in tax deductible costs? Every year, the number of people interested in continuing education is growing rapidly. This is due to the fact that many companies require employees to be strongly involved in developing their knowledge and skills if they are interested in taking a senior position in the company. Postgraduate studies are also a great solution for ambitious people who feel the need to supplement their knowledge gained during their studies.

This solution is also used by people who want to slightly edit their professional path. It is worth knowing that the so-called „postgraduate” is a great base for doing a completely new specialization, which in the future can be supplemented with, for example, training. This option has many advantages, but many give it up for fear of its high cost. In fact, science can be quite expensive. It is for this reason that it is worth focusing on how to minimize the associated fees. Interestingly, there are really many ways.

Postgraduate studies in tax deductible costs

Entrepreneurs wishing to raise their qualifications may decide to start post-graduate studies. This solution, however, involves the payment of certain fees. Therefore, many business owners are asking themselves whether the amounts resulting from continuing education can be included in tax deductible costs? The answer is affirmative, but requires compliance with predetermined rules.

Recognition of postgraduate study fees as tax deductible expenses in the form of expenditure on company development is possible if it is clearly demonstrated that such an undertaking is related to the revenues of a given business activity. The Act on the necessity to pay personal income tax addresses this issue as follows:

  • expenditure is understood as the cost incurred to increase or maintain the company’s revenues;
  • expenditure must be properly documented;
  • expenditure may not be recorded in the catalog of expenses not included in those which constitute tax deductible expenses.

It is good to know that the entry cannot include those expenses that were generated as a result of non-revenue activities. Sometimes, it also happens that individual expenses are excluded from this group for a transitional or permanent period. Usually this happens when they do not meet certain requirements, stating that they could be considered as tax deductible costs. Entrepreneurs should stay up to date with such issues and take into account possible changes in applicable law.

Studies and tax deductible costs

Showing expenses to include in tax deductible costs is not a special challenge for the taxpayer. This process is not particularly complicated, but it is worth knowing that qualifying tuition fees for postgraduate studies in this group of fees is not always quite simple. The biggest problem here is the lack of knowledge within which income group they can be assigned. Difficulties usually appear in the case of faculties of a fairly universal nature, which is why demonstrating that they are directly related to the company’s revenues is not an easy task.

In order to include post-graduate studies in tax deductible costs, their direction should therefore be closely related to the industry in which the enterprise operates. The learning program is intended to supplement the knowledge and skills of its employees, which in turn is intended to generate higher revenues. The fact that the chosen direction is a contribution to the company’s development is to be clear and not require additional translation. In such situations, without major difficulties, fees resulting from continuing education may be included in your tax deductible costs.

Business owners wishing to enter fees for postgraduate or master studies, or other types of supplementing their knowledge and those employed in the company, in the tax deductible costs, can do so, however, they will be required to prove that this undertaking is directly related to the development of business activity. All this must be documented correctly and there is no doubt that this investment will generate profits in the future. It is also worth remembering that staff training, and specifically the costs involved, should also be incurred to secure revenues, which should also be demonstrated.

Let us remember that actions aimed at developing one’s own or staff constitute a solid foundation for the functioning of a business. Science is currently included, and educated employees are worth their weight in gold. Postgraduate studies are a great alternative to getting a PhD, which is much more demanding and time consuming. This is an option for ambitious people for whom their priority is personal development and raising qualifications. It is worth being aware of each of these issues.

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