Low value asset
Under German income tax law, a low-value asset (GWG) is an independently usable, movable and wear-and-tear item of fixed assets with acquisition or production costs of up to EUR 800 in accordance with ) EStG .(2
Acquisition and production costs
Acquisition costs are the expenditures that are made in order to acquire an asset and to put it into an operational state, provided that they can be individually assigned to the asset. The acquisition costs also include ancillary costs (transport, shipping, insurance). Subsequent acquisition costs are to be included if they can be assigned to the same financial year. Reductions in purchase price and any investment deduction that has been made must be deducted ( (1) HGB ).
For the question of whether the respective amount limit has been exceeded for low-value assets, the acquisition or production costs without input tax must always be assumed. The acquisition or production costs without sales tax (net acquisition costs) are also to be assumed for entrepreneurs who are not entitled to input tax deduction (e.g. doctors or entrepreneurs with small business regulations), cf. (2) sentence 1 EStG.
If the taxpayer produces the assets himself, the production costs are to be determined according to the general regulations. If economic goods come from private assets , the deposit value is decisive.
Only things , animals and pseudo-components can be movable assets . Buildings, parts of buildings, land and land do not belong to the movable assets, nor are immaterial assets such as rights of use, licenses and patents.
Depreciable fixed assets
Those movable, immovable or immovable assets that are subject to economic or technical wear and tear are referred to as depreciable assets . Since, according to Paragraph 2 of the Income Tax Act, only fixed assets can be GWG, the expected useful life must be at least one year. The surplus income , there is no fixed assets. The regulation on the GWG applies accordingly, with the exception of the pool depreciation.
Independently usable assets
An asset cannot be used independently if, according to its intended purpose, it can only be used together with other assets of the fixed assets and the assets related to this use are technically coordinated with one another.
A printer (without copier or fax function) cannot be used independently because it needs a PC to send it the data. A computer is also an economic good that cannot be used independently because it requires a monitor, keyboard and mouse. Even a car trailer cannot be used independently because it needs a towing vehicle. These assets are, however, economically independent and can therefore be written off according to the depreciation table.
The seating in cinemas and theaters, the cables for networking an EDP system, software or the lifting platform of a truck can not be used independently . Software that is viewed as a so-called »trivial program« can be activated as a material, movable and independently usable economic asset. A trivial program is when a computer program only stores data sets or data without special processing, e.g. B. Texts or numbers.
In contrast, laptops, tablets, telephones, smartphones, furnishings, books, barrels and bottles can be used independently.
Immediate depreciation for acquisition or production costs without sales tax up to 410/800 euros
If the acquisition costs do not exceed EUR 800 net (prior to 2018: EUR 410 net), the full amount can be deducted from tax as a business expense in the year of acquisition . Alternatively, they can be capitalized and written off normally. Immediate depreciation that was omitted in the year of acquisition cannot be made up for in later years. LVA with acquisition or manufacturing costs of more than 250 euros (before 2018: 150 euros) must also be included in a special directory. The separate entry in a bookkeeping account provided for this purpose fulfills this requirement.
Pool depreciation (collective item) for acquisition or production costs without sales tax of 250 to 1,000 euros
Independently usable assets whose acquisition or production costs do not exceed EUR 250 (before 2018: EUR 150) but not EUR 1,000 can be included in a collective item for each financial year. This collective item is to be broken down equally with 1/5 from the year of acquisition or manufacture ((2a) EStG). The normal useful life is just as irrelevant as the sale or depreciation of the individual assets in the meantime (see (2a) sentence 3 EStG). Subsequent acquisition or production costs increase the value of the pool from the year of the write-up. If a collective item is created in one year, all independently usable assets over 250 (before 2018: 150 euros) and up to 1000 euros must be included ( (2a) sentence 5 EStG). It is therefore not permissible to immediately write off some independently usable assets up to 800 euros (before 2018: 410 euros) and to add others to the pool. If no collective item is created, all independently usable assets over 800 euros (before 2018: 410 euros) are to be written off, taking into account the usual useful life.
The regulation on pool depreciation does not apply to types of surplus income ( (1) No. 7 EStG in conjunction with (2) sentences 1–3 EStG).
Legal regulation in Austria
InEStG, low-value assets are depreciable assets whose acquisition or manufacturing costs do not exceed EUR 800 (up to and including 2019: EUR 400). Low-value assets can be written off in full in the year of acquisition or manufacture.
- cf. also UGB