Revised ruling on tax exemption in the educational sphere

The State Secretary for Finance has updated a policy decision on the topic of the application of value-added tax exemption in the educational field. The new version of the ruling addresses the distinction between public and denominational education and the consequences thereof.

The RKBO registry for short-term vocational education with effect from January 2014 has been subdivided into two separate registries: one for institutions offering vocational education and one for the teachers who operate in this segment. Independently operating teachers, and any teacher whose teaching services are made available through a private company, are required to register with the teachers’ registry in order for value-added tax exemption to apply. Independently operating teachers at educational institutions who teach courses that are recognised by law need not register (whether or not the teacher in question operates through a private company).

A new regime for language courses has been bolted on to the ruling owing to which RKBO registration has been made compulsory for those who wish to teach vocational language courses on a value-added tax exempted basis, by contrast to general language courses, which by definition come under the tax exemption regime.

Finally, a pre-existing ruling concerning (professional) practical training courses for the entrepreneur’s in-house staff and for those who are employed by business partnerships has been updated and integrated into the new ruling, resulting in the courses in this segment enjoying value-added tax exemption provided certain conditions are met. The input tax credit entitlement of the entrepreneur(s) involved is not affected as a result.