A new Legal Notice (LN 175 of 2017), entitled ‘Deductions and Tax Credits (Relevant Qualifications for Industry) Rules has been issued which provides for a tax credit of up to 70% of the study costs paid by a student for a certification, degree or post-graduate degree as approved by the Ministry for Education.
The tax credit, which will be effective as from 1st January 2017, will be deducted against the student’s tax liability on his chargeable income for the year of assessment commencing in the year following that in which the relevant qualification is obtained. Any tax credits which are not absorbed may be carried forward to be allowed as a tax credit for the subsequent ten years of assessment. The beneficiary of the tax credits may be either the student or his / her parents.
The study costs include the fees paid by the student or parent/s to the university or institution for the admission and attendance to the course and for sitting for the examinations required to achieve the relevant qualification.
The following documentation must be submitted with the tax return for the first year of assessment in which the tax credit is claimed:
- A declaration that the individual claiming the tax credits has not been entitled from any source to any reimbursement or compensation for the costs on which the tax credit has been claimed;
- A copy of the certificate issued by the university or institution providing the course, confirming the successful completion of the course; and
- A copy of the tax credit certificate issued by the Department of Education confirming that the qualification obtained is a relevant qualification.
No tax credit certificates may be issued in respect of a course of studies that commences after 31st December 2020 and in respect of applications submitted to the Ministry after 2 years from the day on which the relevant qualification is obtained.
New Guidelines are to be issued in connection with such tax credits, which will be published on the website of the Ministry of Education.