Repayments to brain capital are considered as tuition fees by German fiscal authorities. According to present German law, they are consequently tax deductible

Conditions for BSc students:

According to German law, payments can be considered up to 6.000 EUR. per year as special expenses ("Sonderausgaben"). For a horizon of ten years this accumulates to a  potential reduction of the taxable income of 60.000 EUR. Assuming a marginal tax rate of 42% the maximum resulting tax benefit is 25.200 EUR.. These tax effects increase the attractiveness of the brain capital model even for persons with very high income.

In case of an immediate payment of the tuition fees, tax deductibility is only given during the three year span as enrolled students when hardly any income is generated. The maximum tax deductible amount is often already exploited by other study-related expenses. All other approaches (e.g. tax deduction by parents, consideration as professional expenses/ "Werbungskosten") are not feasible in practice. In case of a loan a subsequent tax deductibility of the principal used for tuition financing is not possible either.

Conditions for Master programs:

Tax deductibility as professional expenses ("Werbungskosten") is not limited. This can yield a tax refund of up to 50% of the annually expended amount. The effective tuition fee burden is consequently halved. These tax savings increase the attractiveness of the brain capital model also if the individual income is very high.

In case of immediate tuition fee payments, the tax deductibility exists only for the two years span while being enrolled during which the individual income is usually very low

The presented forms of possible tax deductibility correspond to the legal situation of October 2011. Future changes or deviating adjudications cannot be excluded. Therefore, brain capital does not take responsibility for the validity of this information.