30.08.2024 13:59
School and science, study and teaching
If the framework conditions for education/professional training are worsened as planned in the government draft of Section 4 No. 21 UStG in the Annual Tax Act 2024, this would have fatal consequences for people’s education and the quality assurance of the assistance systems in Germany.
For many people, education is an opportunity to develop further or to find their way out of an emotional low or crisis and emerge from it stronger with new perspectives. Clients and patients in psychosocial institutions and in support services such as counseling, coaching, psychotherapy, social work and therapy in the health sector and youth welfare must not be placed under additional financial strain by increasing the cost of education. Psychosocial support institutions and specialists as well as self-employed persons must also not be burdened with additional costs through educational expenditure so that they can perform their tasks with appropriate quality.
The implementation of the current draft would mean in detail:
• A VAT obligation for educational institutions and/or their freelance staff would make education more expensive for people, as it is a consumer tax.
• New bureaucratization through a distinction between further training versus education and continuing education is unreasonable, especially for the many small educational institutions, and would result in additional costs for the end customers.
• Participants in further training courses in the psychosocial field often have only a very small budget available for further training, either because their employers are social institutions or authorities or because they have to cover it themselves from a relatively low wage. Increasing the cost of vocational training would therefore harm the quality of work that is oriented towards the common good.
• Freelance fee-earning staff (“self-employed teachers”) are profit-oriented per se, as they have to use their fees to secure their livelihood and that of their families. They would generally be excluded from the VAT exemption for further training if profit-oriented staff were excluded. This would also endanger the infrastructure of the further training market if freelance teachers were to be subject to VAT.
• Training and retraining would also become more expensive for people and institutions if the draft were implemented as it is and self-employed teachers were not explicitly exempted.
Therefore, the signatory associations recommend:
• The VAT exemption provided by the EU VAT system directive, which aims to relieve end consumers of additional costs in education, must actually reach the people (employees, families, children and young people). In contrast, supporting educational institutions that are entitled to deduct input tax is not the aim of the EU directive and should therefore be prevented.
• Not only educational institutions, but also their freelance staff (legally: “self-employed teachers”) must therefore remain expressly exempt from sales tax.
• It is irrelevant for people’s educational opportunities whether the educational institutions make a profit or not. In this sense, the EU and the ECJ have determined that profit-making institutions also serve the public good through their educational services. The exemption must therefore not be made dependent on the modalities of the institutions.
• The certification process by a state authority active in the cultural/educational sector offers legal certainty compared to a certification process by the tax offices. Tax offices cannot provide a certification process in terms of content and would lead to litigation through all instances and to insolvencies among educational service providers and freelance lecturers. However, Section 4 No. 21 must overcome the narrow focus on training in order to comply with European law. A legally binding certification means a structured process that minimizes bureaucracy for educational institutions, freelance workers and authorities and also makes the costs predictable for end consumers in the long term.
• The education of children and young people (number 23) must also be exempted from VAT. Particularly in light of the existing shortage of skilled workers in a field that is traditionally paid less than in the private sector, it is incomprehensible to increase the price of services that serve the common good by charging VAT.
• Supervision and coaching have established themselves as a form of education that serves to ensure quality and further develop qualified services. The exemption through the case law of the ECJ and the Federal Finance Court (BFH ruling of March 20, 2014, VR 3/13) must not be jeopardized by the Annual Tax Act 2024: Therefore, “private teachers” must remain exempt from sales tax even outside the structures of school and university teaching and the “closely related services” must be included in the area to be favored.
The signatory associations call on the Bundestag and Bundesrat to implement Article 132 of the VAT Directive comprehensively in accordance with its intention:
A comprehensive exemption from educational services without new bureaucracy, for the benefit of people in need of help and in the interest of the common good, must be legally secured.
Scientific contact:
Dr. Joachim Wenzel, [email protected]
Member of the Institute Management, ifs – Institute for Systemic Family Therapy, Supervision and Organizational Development
Further information:
