Field help:
(2018)
Reduction amounts in accordance with section 7g, para. 2, sentence 2 of the Income Tax Act (EStG)
For the planned acquisition or production of movable assets, you can withhold an investment deduction from off-balance profits amounting to 40% of the expected acquisition or production costs, up to a maximum of 200.000 Euro (sect. 7g, paras. 1 to 4 of the Income Tax Act (EStG)) (see page "Investment deductions"("Investitionsabzugsbeträge")).
If the beneficiary asset for which an investment deduction has been formed is purchased or produced within the investment period of 3 years, the following applies:
- The investment deduction amount taken into account for the acquired asset must be added to the off-balance profit. However, the addition is limited to the amount deducted for the asset in question, up to a maximum of 40% of the acquisition or production costs.
- The actual acquisition or production costs of the asset are reduced from profit by the amount of the previously used investment deduction (up to 40 % of the APC). However, the reduction may not be higher than the amount of the investment deduction. This reduction amount must be recorded in the accounting books.
SteuerGo: The reduction decreases the assessment basis for further depreciation, such as for straight-line depreciation and for special depreciation in accordance with sect 7g, para. 5 to 6 of the Income Tax Act (EStG). This can result in assets becoming "low-value" assets for tax purposes if the assessment basis falls below 250 Euro or 1.000 Euro, respectively.
