Deductions for vocational training and education costs – Part 3 Back payments

Since the tax period 2016, private individuals can deduct their costs for job-oriented education and training, including retraining, up to a total amount of CHF 12,000 from their taxes. In our three-part series, we explain which costs can be deducted under what conditions. In this last post, we explain when private individuals may face additional payments.

The Deduction

‍As hinted in Part 1 and Part 2 it is a "general deduction". This means that a total of CHF 12,000 can be deducted for education and training costs as well as for retraining costs. Moreover, it is clear from Art. 17 Para. 1bis in conjunction with Art. Art. 33 Para. 1 Bst. J DBG that only those costs can be deducted which are paid by the taxpayer themselves.‍

Additional Payments

‍Additional payments may arise if the employer decides, after the training or retraining, to cover part or all of the costs. According to Art. 17 Para. 1bis DBG, these do not constitute taxable income. Thus, too many deductions were made during the tax period, which need to be adjusted later. This can lead to additional payments. It is also important to keep in mind the limit of the total amount of CHF 20,000. To illustrate with an example: The training costs amount to CHF 30,000. The total deduction of CHF 12,000 was made in the tax declaration. Additional payments only occur if the employer decides to cover more than CHF 18,000 of the costs. If less is covered, the employee's share is still greater than CHF 12,000, and they are entitled to the full deduction. However, if more is covered, e.g., CHF 20,000, then the employer effectively only paid CHF 10,000 themselves. Hence, the difference of CHF 2,000 needs to be adjusted in the coming tax period, which can lead to additional payments.

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