Although the vocational training contribution has been phased out this year, the act on social contribution tax makes it possible to continue to apply earlier tax benefits.

As of 1 January 2022 the tax on vocational training contribution was abolished, however, the benefit system of vocational training contribution was not abolished, as the earlier tax benefit for specialized education and dual training can now be claimed from the social contribution tax.

All those are entitled to claim a tax benefit who have concluded a vocational training employment contract with a student or a person participating in the training (including the student contract concluded as per the old rules) or a co-operation agreement under the old Vocational Training Act or a university student employment contract with a university student or a co-operation agreement with the higher education institution in the case of a BA/BSc courses requiring practice.

It is important that the tax credit can be used after all the tax benefits that can be claimed from the social contribution tax have been applied. The situation is favorable if the tax benefit that can be enforced is more than the tax to be paid, because in this case it can be reclaimed with tax refund. Furthermore, if the taxpayer is not required to pay social contribution tax because, for example, he is subject to a SME corporate tax, this tax credit can also be claimed in the form of a tax refund.

On the basis of the tax credit for vocational education, in vocational education the social contribution tax is reduced with the amount equal to the number of working days in the reference month multiplied by the rate per working day calculated on the basis of the proportional cost of vocational education of a student in a student relationship or a person in an adult education relationship with a vocational training institution maintained by the state or by a maintainer with a vocational training agreement or co-operation agreement.

According to the tax credit for dual education, the tax credit per a student in higher education is the product of the number of training days actually completed in the relevant month and the rate per one working day calculated with the proportional basic standard normative provided for dual education and BA/BSc course requiring practice.

Please contact our colleagues if you wish to have a detailed interpretation of this legislation as this newsletter offers general understanding.

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