Special depreciation
In German tax law, the term special depreciation refers to depreciation that is carried out on the basis of special tax regulations and that occur alongside normal depreciation . Special depreciation is not directly related to impairment and is therefore of a subsidy nature. In contrast to the increased depreciation , the regular depreciation of the asset is not affected by the special depreciation. Increased depreciation ( e.g. § 7i EStG ) takes the place of the regular depreciation.
Special depreciation for small and medium-sized enterprises § 7 g EStG
The currently most common form of special depreciation is the special depreciation for the promotion of small and medium-sized businesses in accordance with Section 7g (5) of the Income Tax Act . It amounts to a total of up to 20% of the acquisition or production costs and can be used in the year of acquisition and in the following four financial years .
requirements
In order to be able to claim the special depreciation, the following requirements must all be met:
Properties of the investment object
- The investment object must be movable. This means that the special depreciation according to § 7g EStG for buildings and intangible assets is excluded.
- The investment object must be attributable to the fixed assets . According to the prevailing opinion , the assumption of fixed assets is that a special depreciation is only permissible in the case of commercial operations, independent businesses or agricultural and forestry operations, because only with these types of income does “fixed assets” exist under tax law. Employees, administrators of capital assets , landlords and retirees can therefore not take advantage of special depreciation.
Features of the establishment
- The business assets of the previous financial year may not exceed 235,000 euros for traders and freelancers.
- For companies that determine their profit by means of an income statement, the previous year's profit may not exceed 100,000 euros.
- In the case of farmers and foresters, the economic value or equivalent economic value at the end of the previous year must not exceed EUR 125,000.
Use of the investment property
- The investment object must remain in the domestic operating facility for at least the year of acquisition or manufacture and the following year.
- In the year of acquisition or manufacture and the following year, the investment property must be used exclusively or almost exclusively for operational purposes. Almost exclusively business use means that private use of up to 10% is harmless. When using a car, the operational use must be proven by means of a logbook. The journeys between home and work are included in business use.
Legal consequences
If the prerequisites are met, the taxpayer may claim , in addition to normal depreciation, a special depreciation totaling up to 20 percent of the acquisition / production costs in the year of acquisition and in the following four years after deduction of an investment deduction . The depreciation volume can be freely distributed over the five-year benefit period. After the benefit period has expired, the remaining book value is to be distributed evenly over the remaining period of use.
Legal situation until 2007
Up until 2007, the special depreciation was subject to other conditions. The following differences arise compared to the new law:
- Only new investment properties were eligible
- The operating capital limit was 204,517 euros (economic value for agriculture and forestry: 122,710 euros).
- There was no limit to the amount of taxpayers who generated their profit through an income / surplus calculation.
- A savings reserve had to be formed beforehand for the investment property.
The formation of the reserve according to § 7 g EStG (old version) was a prerequisite for claiming the special depreciation. The reserve had to be specified precisely, i.e. H. the asset to be purchased had to be named exactly. General naming was not permitted (example: vehicle). It was important that the formation and dissolution of the reserve according to § 7 g EStG could be followed in the balance sheet. In addition, care had to be taken to ensure that the reserve was created before the asset was acquired or manufactured so that the reserve could fulfill its intended financing function and there was a financing connection between tax savings due to the formation of reserves and the subsequent purchase of the asset. Particularly a reserve formation as part of a due findings of an audit amended balance sheet have not been recognized in most cases due to the lack of financing relationship by the tax.
According to the new law, the investment allowance to be recorded off the balance sheet has been substituted for the savings reserve . However, the formation of an investment deduction is not a prerequisite for the special depreciation.
Special depreciation for the new rental apartment construction § 7b EStG
Since 2018, under certain conditions, a special depreciation of 5% in the year of acquisition or manufacture and in the following three years can be claimed for the construction or purchase of new rental apartments.
Special depreciation according to § 4 Development Area Act
The special depreciation or investment allowance in the new federal states expired in 2016.
Special depreciation according to § 76 EStDV
Special depreciation for agricultural and forestry operations was repealed by the Annual Tax Act 1996.
Individual evidence
- ↑ § 7g EStG
- ↑ BMF of November 20, 2013 (BStBl. I p. 1493 section I. 6. b)
- ↑ § 7a Paragraph 9 EStG