In July of this year, the Supreme Administrative Court (SAC) decided on a lawsuit brought by a natural person against the tax office. The claimant had claimed tax benefits for his son in his 2021 tax return for the month of March, while his son was born on 1 March 1995. The tax office refused to accept the claim for March 2021 on the grounds that his son had already reached the age of 26 on 1 March 2021, so the conditions for claiming the tax benefit were not fulfilled at the beginning of the month, because once a person reaches the age of 26, he loses the status of a ‘dependent child’.
The tax office also based on the statement of the Ministry of Finance, according to which the tax benefit (or the student tax discount) can no longer be accepted in the month at the beginning of which (i.e. on the 1st day) the person has reached the age of 26.
SAC, in its judgment No. 59 Af 3/2023-60, decided that this interpretation is not correct. Although the SAC acknowledges that this topic is not clearly resolved in the Income Tax Act and acknowledges that there are two linguistic interpretations – one that the tax benefit (student discount) can be accepted even for the month in which the person reached the age of 26, second that the tax benefit (student tax discount) cannot be accepted – it determines that it is appropriate to lean towards the linguistic interpretation that is more favorable to the taxpayer.
Therefore, the tax offices should now recognize entitlement to tax benefits and tax credits even for months in which the person whose age is being assessed has already reached the age of 26 on the first day of the month.