News on Tax Law October 2017
New rules for the depreciation of low-value assets as of 1.1.2018
The law against harmful tax practices in connection with the transfer of rights raised the limits for independently usable movable fixed assets whose acquisition and production costs do not exceed certain limits – so-called low-value assets (LVA). Thereafter, it shall apply from 1.1.2018:
Immediate depreciation: GWG whose acquisition and production costs do not exceed € 800 (until 31.12.2017 = € 410) can be written off immediately in the year of acquisition or production. If the right is exercised, CCLs exceeding € 250 (until 31.12.2017 = € 150) must be entered in a current list, unless this information can be seen in the accounts. If the entrepreneur decides to write off the GWG immediately for less than € 800, the general depreciation regulations apply to assets over € 800.
Computer programs: The limit of € 410 for the treatment of computer programs such as trivial programs mentioned in the income tax guidelines was based on the limit for the valuation freedom of low-value assets. In the context of the next revision of the income tax guidelines, an increase to € 800 is also planned here.
Multiple items: It is still possible to enter GWG over €250 (until 31.12.2017 = €150) and under €1,000 in an annual collective item and to write it off over 5 years. They do not need to be included in a running directory. Assets under € 250 (under € 150 until 31.21.2017) can also be included in the collective item and do not necessarily have to be fully written off in the year of acquisition.
Note: It should be noted that the option for immediate depreciation or the collective item can only be exercised uniformly for all assets acquired in a fiscal year.
Consideration: In view of these new regulations, it may be worth postponing the procurement of such assets until 2018 – from a tax point of view and if economically viable – in order to take advantage of the improved depreciation conditions.