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The tax authorities don’t allow a deduction of education costs from older years in my tax return. Is that correct?

Question:

I have a problem with the belastingdienst concerning an aangifte I’ve made for 2011, in which I’ve declared my costs of university study over three years as a deduction (study years 2006/07, 2007/08 and 2008/09, in which I didn’t work at all). Consequently, in 2013, I’ve received a voorlopige aanslag which returned to me 6,508 euros.

About a month ago, I was requested by the Belastingdienst to provide proof and specifications. Upon the receipt of these (I’ve sent all documents as they’ve required), one of the belasting officials called me last week, informing that I have not filed my aangifte correctly and thus, I need to pay back the whole amount + interest. Overall, he didn’t say that the basis for the declaration is wrong but simply that I have not declared these costs separately in aangiftes for the years in which the costs were made but only in 2011 and so I’m not entitled to anything. He said that the definitieve aanslag will come shortly and today I also received his letter of explanation.

I believe that I have the right on my side: I haven’t lied and I have given all proofs so I believe I’m entitled to this money. I would appreciate your professional advice and help on this matter.

Answer:

The tax authorities are right. Education costs must be declared in the year the costs were made. It is not possible to totalize all the education costs and deduct them in a later year. So indeed separate tax returns must be filed for each year. Consequence is that every year will lead to a negative income if you had no other source of income. This negative income can be carried forward to a later year with income. In your situation this will however not lead to the same result as what you have tried.

Reasons:

  • each year a threshold of € 500 (currently € 250) is applicable for education costs which means that the first € 500 is not deductible. By totalizing the education costs you tried to reduce this threshold from € 1,500 in total for three (or 4) years to only € 500.

  • a tax return must be filed within 5 years after the end of the tax year (plus applicable time extension). This means that for 2006, 2007, and 2008 officially a tax return can’t be filed anymore, only for 2009. So you totally depend on the kindness of the tax authorities trying to get a refund for previous years. This may be done by writing a letter of objection to the tax authorities against the 2011 tax claim. For this a summary of all education costs specified for each year in which payments were made and confirmation of income earned by you in 2006 till 2011. But there is absolutely no guarantee that the tax authorities will cooperate. Officially you are too late. 

 

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