5. What are expenses of self-education? Can I claim a deduction for tax purposes if I undertake a course related to my employment?

5. What are expenses of self-education? Can I claim a deduction for tax purposes if I undertake a course related to my employment?

Under sections 12(1) and 12(6) of the Inland Revenue Ordinance, self-education expenses are expenses paid by the taxpayer for fees (including tuition and examination fees) in connection with a prescribed course of education conducted by , or examination fees paid for examinations held by, a specified institution (or education provider) for the purpose of gaining or maintaining qualifications for use in any employment. The amount of deduction per year must not exceed $100,000 starting from the assessment year 2017/18 onwards. 

Self-studying is not undertaking “a prescribed course of education”. Hence, expenses incurred in connection with self-study, such as on the purchase of books, cannot be claimed. However, the scope of self-education expenses is extended to cover fees for qualified examinations set by professional bodies without requiring the taxpayers to undertake a prescribed course of education. Examples of these professions include certified public accountants, surveyors or architects, etc.

Fees that have been reimbursed or are reimbursable by an employer, the Government (such as under the Continuing Education Fund) or any other person cannot be deducted unless the reimbursement is taxable.

What is a “prescribed course of education”?

A “prescribed course of education” (as defined under section 12(6) of the Inland Revenue Ordinance,) is a course undertaken to gain or maintain qualifications for use in the current employment, or a planned new employment and being: 

• a course of education provided by an education provider; or
• a training or development course provided by a trade, professional or business association (e.g. Hong Kong Institute of Bankers, Hong Kong Management Association, The Association of Chartered Certified Accountants, Institution of Mechanical Engineers, Professional Insurance Brokers Association, Quality Tourism Services Association, etc.); or
• a training or development course accredited or recognized by an institution specified in Schedule 13 of the Inland Revenue Ordinance.

In other words, the course must be related either to the present job or a job in the future. For examples, course fees in the following situations may be qualified for deductions: 

• a management course taken by a business executive;
• a commercial or computer course taken by a secretary or clerk;
• a vocational training course taken by a technician;
• a continuing professional development seminar taken by an accountant or a lawyer. 

A prescribed course of education has to be a course undertaken by the taxpayer. The amount is not deductible if the taxpayer did not participate in any lessons.

Course of education provided by an education provider

In general, education providers include:

• any university, university college or technical college either in Hong Kong or overseas;
• any technical institute, industrial training centre, vocational training centre or skills centre in Hong Kong;
• any Government school or other school registered or exempted from registration under the Education Ordinance;
• any institution approved by the Commissioner of Inland Revenue;

Private tutoring fees are not deductible since they are not paid in connection with a prescribed course of education and are not provided by a specified education provider.