Tax Deduction for a Master’s Degree for the Self-Employed: What You Should Know

Yes, but it always depends on the master’s degree’s relevance to your professional activity. The Spanish Tax Agency (Dirección General de Tributos) has clarified that, for an expense like a master’s degree to be deductible, it must be linked to generating income from your business activity. This means that only courses or studies that truly add value to your work and that you can justify will be deductible.

For a self-employed person to deduct the cost of a master’s degree, it’s important to keep the following in mind:

• The expense must be directly related to your business activity.

• You must keep the original or simplified invoice for the master’s degree payment, which must be recorded in your mandatory accounting records.

• If the master’s degree was paid for over more than one tax year, the expense can be allocated proportionally to each period, provided the cash basis accounting method was not chosen.

Verifying that the master’s degree actually contributes to economic activity and income generation falls to the tax authorities. Therefore, it is advisable to keep all documentation and evidence that demonstrates the professional relevance of the course.

If you cannot demonstrate that the master’s degree contributes to your economic activity, the expense will not be deductible. This could lead to adjustments in your income tax return in the event of an audit. Therefore, it is always advisable to plan and properly record these expenses.

If you are considering a master’s degree to enhance your professional activity, keep all documentation, properly record the expense, and ensure that the course content aligns with your daily work. This will maximize the possibility of it being tax-deductible.