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Old 17.08.2021, 12:53
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Tax on Functional training

Hello all,

I am writing regarding the tax treatment of training required by an employer. This is for Vaud.

Basically, if my employer asks me to attend an external training paid by the employer as part of the job, I have to pay tax on the training.

I understand the principle that it is treated as a taxable benefit, therefore, has to be declared. However, I have a challenge in my mind i.e. I didn't ask for the training - my employer required it. Should it not pick the tab?

Any suggestions to optimize the tax situation here?

Cheers
Aby
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Old 17.08.2021, 13:01
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Re: Tax on Functional training

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Hello all,

I am writing regarding the tax treatment of training required by an employer. This is for Vaud.

Basically, if my employer asks me to attend an external training paid by the employer as part of the job, I have to pay tax on the training.

I understand the principle that it is treated as a taxable benefit, therefore, has to be declared. However, I have a challenge in my mind i.e. I didn't ask for the training - my employer required it. Should it not pick the tab?

Any suggestions to optimize the tax situation here?

Cheers
Aby
Are you sure, you even get a tax reduction for training even if you don't have any costs.
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Old 17.08.2021, 13:12
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Re: Tax on Functional training

So if you pay for the training yourself your could deduct the cost, but if your employer pays it is taxed as a benefit?

It depends how much it costs, how useful it will be and whether you want to keep your job!
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Old 17.08.2021, 13:28
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Re: Tax on Functional training

Weird. All my training is paid for by my employer and there's absolutely no tax on it as a benefit. Is this just a Vaud thing?
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Old 17.08.2021, 15:26
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Re: Tax on Functional training

Do you mean that your employer will include the training cost in the salary certificate (e.g. as [7] other benefits)?

Not sure on what does it depend whether a required training cost is included or not in the salary certificate, but if it does - I think you are indeed on the hook for the income tax.
Would be a fair move from your employer to give you a cash bonus of the ~40% training cost to cover the income tax (and the income tax on the bonus)
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Old 17.08.2021, 16:50
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Re: Tax on Functional training

From this (axa).
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Only the costs of professional training and continuing development (incl. retraining) are deductible, up to an amount of CHF 12,000. Professional training and continuing development refers to all training activities pursued by the taxpayer to further their professional advancement. It is therefore conditional on being able and willing to apply the knowhow so acquired to earning a living.
Key here is whether the training is professional/continuing development. I'm assuming not. In which case, if your employer pays, it might be beneficial if they get bulk discount. I don't think your employer is required to pay for such training, but it'd be nice if they did. Companies general don't get involved and have no interest in their employee's tax affairs.

Cases where it wouldn't be deductable: language lessons, initial skills training (e.g. teaching you to be a train driver).
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Old 17.08.2021, 17:28
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Re: Tax on Functional training

If the training costs that your employer paid is included as salary on your salary certificate, then this benefit is no different than a cash payment made to you for whatever reason by your employer. When you file your tax return, you can itemize training costs as part of the deduction instead of taking a lump sum (fixed) deduction. So it largely depends on how much training / continuing education cost you have - i.e. if more than the standard lump sum, you'd itemize; otherwise, take the standard deduction. At least this is how it works in ZH, not sure about the specific in VD.
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Old 17.08.2021, 18:39
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Re: Tax on Functional training

Is it a professional course or is your employer financing your MBA and giving you the money?

Professional courses are typically paid by employers and you do not have to pay tax - if your employer is giving you amount X to finance your MBA it will end up on your salary certificate and be taxable. So it depends a bit what is happening.
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