After all, what education expenses are deductible in the IRS?

Na time when the return to classes begins, the Tax and Customs Authority (TA) came to clarify, through a shared publication on social network Facebook, what education expenses are deductible in the IRS. 

So the IRS clarifies that for a purchase of school supplies to be accepted in the Education category, it is necessary to meet two requirements:

• VAT rate reduced or exempt: School books and textbooks with VAT free or at a reduced rate of 6% fall into this category.
• CAE of the establishment: The invoice shall be issued by an establishment registered with the Education or Trade CAE to Retail Books (specialized books and stationery).

More: “The invoice must contain only these products with reduced VAT rate”. 

The AT also explains that “school items subject to the standard VAT rate of 23% — such as notebooks, pens, backpacks, school cases or uniforms — are not considered education expenses for the purposes of IRS, but fall into the category of general and family expenses“.

“ The reduced VAT rates in the Azores and Madeira are 4%, and the normal rate is 16% and 22% respectively”, read in the same publication. 

After all, what is the percentage and the limit of deduction of school material expenditure?

The government explains that “you can deduct 30% of school material expenditure as education expenditure, up to the overall limit of EUR 800”.

“In the case of education expenditure related to students attending educational establishments located in territories of the interior or in the Autonomous Regions, the percentage of deduction increases to 40% and the overall limit of deduction to EUR 1,000,” the Executive said.

What expenses can be considered?

The Executive also explains that, “in general, education expenditure can be deducted from expenditure related to the frequency of educational establishments, including the acquisition of materials commonly used in schools and universities.”.

“ However, if you buy this material in an establishment whose main activity is not the sale of school items (such as a supermarket or technology store), the invoice can be automatically classified in e-Invoice as general and family expense ", you can read on the same portal.

Therefore, the government explains, “until the end of February of the year following which invoices are reported, you must access E-invoice and confirm that the expenditure is correctly classified, changing the classification if necessary.”.

A study published by ConsumerChoice reveals that 43% of Portuguese expect to spend between EUR 100 and EUR 250 per child on their return to class, while 10% point to less than EUR 100.

“ The return to school remains one of the periods of greatest financial pressure for Portuguese families. Between the increase in the cost of living and the costs associated with the new school year, consumers are obliged to reorganize the family budget and find new ways to save”, can be read in a press release sent to News to Minutes.

According to the study, “83% of consumers admit that preparing to return to school will be more expensive than last year, while 86% believe that these costs will continue to increase in the coming years.”.