With the judgment of June 28, 2017 (5 K 2388/15), the Rhineland-Palatinate Finance Court ruled that the entitlement to child benefit does not end when the child has reached a first professional qualification (before the age of 25) , but only when the career goal that has been strived for from the start has been achieved.
In principle, children between the ages of 18 and 25 – provided all other legal requirements are met – are entitled to child benefit until they have completed initial vocational training or a first degree. After completing vocational training or a course of study that enables them to take up a profession, the tax authorities generally accept the existence of a tax-damaging secondary education, with the result that there is no entitlement to child benefit and tax exemptions if the child is in gainful employment (§ 32 para. 4 sentence 2 EStG).
What does the judgment of the finance court mean?
The Rhineland-Palatinate Finance Court has now clarified in its decision of June 28, 2017 that in the case of a so-called multi-act training, initial vocational training does not necessarily end when the first (objective) vocational qualification is achieved, but only when that of The desired career goal of multi-act training has been achieved. A so-called multi-act training measure, in which the first vocational qualification is only an integral part of a uniform training, is to be qualified as a uniform initial training if the training measures are coordinated in terms of time and content so that the training should be continued after reaching the first qualification and the professional goal determined by the parents and the child can only be achieved with the advanced degree. If these prerequisites are met, the entitlement to child benefit as part of the multi-act training measure continues to exist even after the first professional qualification has been achieved, whereby it is irrelevant whether or to what extent the child is also gainfully employed in addition to continuing the training.
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Why was there a complaint??
In the case to be decided by the tax court, the mother had sued a daughter born in December 1991, who successfully completed her training as a “real estate agent” in July 2015 and took part in a course of the IHK “certified real estate specialist” from October 2015. A prerequisite for taking the exam for a “certified real estate specialist” is in addition to a passed final examination for a “real estate agent” and at least one year of professional experience after completing an apprenticeship. The daughter was therefore employed by a training company in parallel with her training at the Chamber of Commerce from July 2015.
The responsible family fund rejected the child benefit payment from August 2015, since the daughter had already completed her first vocational training in July 2015 and then started working. The plaintiff initially objected to the rejection decision and claimed that her daughter had not yet achieved the professional goal of "real estate specialist", require at least one year of full-time professional experience. After unsuccessful opposition proceedings, the plaintiff brought an action before the tax court – with success.
The Rhineland-Palatinate Finance Court followed the plaintiff’s opinion and confirmed that the daughter’s initial training had not been completed with the first final exam for a “real estate agent”, but only with the further qualifying completion of the exam as a “certified real estate specialist”. The daughter had strived for this professional goal from the beginning and only after completing the “real estate agent” degree to reach can continue without interruption in August 2015 immediately after the end of the first stage of training in July 2015. Since initial training did not end in July 2015, employment also started in August 2015 for the Granting a right to child benefit until the age of 25 is considered immaterial.
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