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Certified Tax Advisor, Manager, National Office Tax & Legal
Senior Consultant, National Office Tax & Legal
The tax-reducing recognition of payments that parents make in connection with their children’s school attendance is also significant because of the steadily increasing number of private schools in Germany. Under Section 10 (1) no. 9 of the German Income Tax Act (Einkommensteuergesetz; EStG), parents may, under certain conditions, claim 30% of the fee they pay for their child’s attendance at a private or predominantly privately financed school, up to a maximum of EUR 5,000, as special expenses in their income tax return. Expenses for accommodation, supervision and meals are not eligible. Whether and under what conditions contributions made via the support association of a state-recognized substitute school can also be deductible as special expenses was decided by the German Federal Fiscal Court (Bundesfinanzhof; BFH) in its judgment of June 3, 2026 (case no. X R 27/23).
The jointly assessed parents of two children paid a total of EUR 1,000 in the year under dispute 2019 to the non-profit support association of a state-recognized substitute school run by a foundation. Its statutes permitted, in addition to supporting teaching activities and school life, inter alia, the promotion of events, study trips, projects and materials. The support association forwarded the parents’ payments to the school sponsor for specific purposes. In their income tax return the parents claimed these payments as special expenses for school fees; the support association certified that the payments had been used to finance the school sponsor’s own share and the school’s operating costs and not for accommodation, supervision or meals. The tax office denied the special expense deduction because, according to the statutes, the payments were not limited to school attendance. The tax court and the BFH took a different view.
The BFH confirmed the decision of the lower court and the special expense deduction for payments to a support association as school fees within the meaning of Section 10 (1) no. 9 EStG, if, from an economic perspective, they are made as consideration for the child’s attendance at school. It is not necessary that the parents pay directly to the school or the school sponsor. It is sufficient that the support association forwards the funds to the school sponsor, that the latter obtains actual disposal authority and that the contributions are used for normal school operations.
The decisive factor is the factual earmarking. For the parents’ economic burden it makes no difference whether the school charges school fees directly or the normal school operation is co-financed via mandatory contributions to a support association. However, the contributions must not serve purposes beyond that. If exclusive forwarding and use for normal school operations are already guaranteed by the statutes, this can regularly be examined on the basis of the statutes.
If a sufficiently specific statutory provision is lacking, the deduction is not excluded. In that case the taxpayer must demonstrate in the individual case that the support association passed on the parental contributions to the school sponsor to finance the costs of normal school operations and that the sponsor used them exclusively for this purpose. In the case in dispute this evidence was provided. The contributions were therefore to be treated as school fees and not as donations.
Notice:
Taxpayers should obtain a meaningful certificate from the support association and the school sponsor confirming the forwarding and exclusive use of the contributions for normal school operations. If the required documents cannot be provided, a deduction as special expenses for school fees is excluded. A donation within the meaning of Section 10b EStG will generally not be present, because a payment to such a support association is likely to be regarded as consideration for the child’s school attendance.