Deduction for Expenses of Self-Education
You may claim deductions for expenses of self-education provided that the prescribed conditions are satisfied. This page will tell you what types of expenses you can claim, the prescribed course of education, approved education providers, amount of allowable deduction, how and when to claim, the supporting documents you should retain and the frequently asked questions.
Expenses of Self-Education
Under Salaries Tax, the expenses of self-education (SEE) allowable for deduction include tuition fee and the related examination fee paid for a prescribed course of education for gaining or maintaining qualifications for use in either a current or a planned employment. Examples of course of education are:
- 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 attended by an accountant or lawyer.
Prescribed Course of Education
A prescribed course of education is a course undertaken to gain or maintain qualifications for use in any 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; or
- a training or development course accredited or recognized by an institution specified in Schedule 13 of the Inland Revenue Ordinance (IRO).
A. Course of education provided by an education provider
Education providers include:
(a) Universities, university colleges or technical colleges.
(b) A place of education to which the Education Ordinance (EO) does not apply by virtue of section 2 of the EO. Please refer to the list of universities, colleges and institutes listed in that section. You may check the list of institutions providing local post-secondary education under Education Bureau’s website.
(c) Schools registered under section 13(a) of the EO. You may check the list of registered schools under Education Bureau’s website.
(d) Schools exempted from registration under section 9(1) of the EO which mainly cover schools entirely maintained and controlled by the Government and religious bodies; and schools solely providing non-local course regulated under the Non-local Higher and Professional Education (Regulation) Ordinance. You may check the list of Non-local Higher and Professional Education Courses under Education Bureau’s website.
(e) Institutions approved by the Commissioner of Inland Revenue under Section 16C(1) of the IRO.
(f) Institutions specifically approved by the Commissioner of Inland Revenue under section 12(6)(e) of the IRO:
• Hong Kong Productivity Council (w.e.f. 1.4.1996)
• The Arts School of the Hong Kong Arts Centre (w.e.f. 1.4.1996)
• Charmtime Limited – Pang’s Music Therapy Centre (w.e.f. 28.9.1998)
(Only teachers enrolled for the course can claim a tax deduction, but not other students)
• The Continuous Learning Centre of the Vocational Training Council (w.e.f. 6.1.1999)
• Top Express Consultants Limited – Rigos US CPA Review (w.e.f. 31.10.2000)
• Hong Kong Trade Development Council (w.e.f. 19.11.2001)
• Phillip Institute of Financial Learning Co. Limited (w.e.f. 30.10.2002)
• Physical Fitness Association of Hong Kong, China Limited (w.e.f. 25.3.2003)
• International Health and Fitness Consultants Limited (w.e.f. 27.11.2003)
• Schools exempted under sections 9(3) and 9(5) of the EO (w.e.f. 20.6.2002).
(You have to check with your school or institution as to whether the course undertaken by you is exempted from registration under the EO)
Payments to a private tutor are not deductible (whether supported by receipts or not) because a private tutor is not a specified education provider and the fees paid are not in connection with a prescribed course of education.
B. Training or development course provided by a trade, professional or business association
Generally, they are referring to courses provided by organizations like 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.
C. Training or development course accredited or recognized by an institution specified in Schedule 13 of the IRO.
For examples, courses accredited or recognized by The Architects Registration Board, The Construction Industry Training Authority, The Chinese Medicine Council of Hong Kong, and other major trade associations for the regulated professions are regarded as a prescribed course of education. It also includes courses accredited by The Hong Kong Council for Accreditation of Academic and Vocational Qualifications.
Taxpayers applying for deductions are required to provide details of recognized or accredited courses and confirmation from the institutions.
Amount of Allowable Deduction
You should claim deduction for the actual amount of SEE in the year you paid.
The maximum deductible amount is $60,000 for the years of assessment 2009/10 to 2012/13 and $80,000 for the years of assessment 2013/14 to 2016/17. From the year of assessment 2017/18 onwards, the deduction ceiling for SEE has been increased to $100,000*. However, if you receive a full or partial refund of the course fees from your employer, the Government (such as under the Continuing Education Fund) or any other person/organization, you should only claim a deduction for the net amount you have paid.
* Legislative amendments are required for implementing the tax measures as proposed by the Financial Secretary in the 2017-18 Budget.
Furthermore, the IRO specifically provides that the same payment cannot be deducted twice.
How and When to Claim
You must claim deductions for SEE for the year of assessment during which the payments were made. Course participants are sometimes required to make payments in one year of assessment, say February 2016, for courses that commence in a subsequent year of assessment, say September 2016. In such cases, deduction for SEE should be claimed for the earlier year of assessment: in this example, 2015/16 instead of 2016/17.
If you have received full or partial reimbursement of course fees, you can either claim the balance or claim the full amount but treat the reimbursed amount as income. The following examples will help you understand what you have to do.
If Mr L paid $20,000 in course fees during the year of assessment 2015/16 and received a refund of $8,000 from his employer within the same year, the amount of his claim depends on how the reimbursed amount is treated in the employer’s tax return for the year of assessment 2015/16.
Income Reported by Employer in Form IR56 Series
Amount of Deduction to be Claimed in Mr L’s Tax Return
$8,000 was included as part of Mr L’s income
$8,000 was not included as part of Mr L’s income
In the same situation as Example 1, Mr L received the refund a year later, i.e. in the year of assessment 2016/17. He may claim a deduction for $20,000 in his 2015/16 tax return, but he must remember to report the reimbursed sum of $8,000 as income for the year of assessment 2016/17.
To avoid understating his assessable income, Mr L should report the reimbursed sum of $8,000 as his 2016/17 income. Whether or not the sum of $8,000 was reported in the employer's tax return for the year of assessment 2016/17 will not affect his obligation to do so.
You need not attach any documentary evidence to your Tax Return – Individuals (BIR60). However, to substantiate your deduction claim and to prove that the proper amount was deductible, you should retain the receipts for a period of 6 years after the expiration of the year of assessment in which the payments were made. You are required to produce receipts if your case is selected for review.Frequently Asked Questions