If you are considering acquiring a Master of Business Administration (MBA) or taking an LL.M. program, in Belgium or abroad, in order to further develop your professional career, it is often important to know if the tuition fees and other related expenses are tax-deductible. The cost of such a degree can vary, but the average tuition would easily run into the tens of thousands of euros, especially if you attend one of the top business schools.
While in some countries you can write off student loans on your taxes, this is not possible in Belgium. There is only the general rule of Article 49 of the Belgian Income Tax Code of 1992, that sets the conditions for an expense to qualify as a tax-deductible business expense.
For this, several conditions must be met: (1) the expense must necessarily relate to the exercise of a professional activity; (2) it must have been made or borne during the taxable period; (3) it must have been made or done in order to acquire or retain taxable income; (4) the amount must be justified by providing supporting documents.
If you follow an MBA course or LL.M. program and you do this after you have already started working (after only a few months or even later on in your career), and it can be demonstrated that this is directly related to the further development of your career, the cost will normally meet the conditions of Article 49 BITC92. Basically, this would not be the case if you did it right after graduating, in which case you have not yet earned any professional income.
In this context, it is irrelevant whether your employer requires you to follow an MBA or LL.M. or whether you do this on your own initiative. Nor is it relevant whether you combine your studies with your professional career or instead quit your job and fully focus on your studies. In either case, the total cost can be considered an expense if the above conditions are met.
The expenses qualifying as tax-deductible would not be limited to the tuition fees alone but could also include costs for study material (e.g. books and printing), laptop, company and intercampus visits, travel and accommodation costs. Direct study costs would include additional courses, compulsory literature, and study room expenses. Travel and transport costs can be deducted for trips between your place of residence and the training location (i.e. by car, bike, public transport, etc.).
As the total cost will often be considerable, instead of deducting the full amount in the year you paid it, you could spread your tax deduction out over time and deduct it over several tax years (‘depreciation’). The argument being that you benefit from these studies for more than one year, so consequently you would deduct the cost over several years.
TAXPATRIA® can advise you on claiming your tax deductions correctly and help you with your personal tax filing.