Fixed Assets Overview
Fixed assets include all long-term assets used by your company. These assets include not only physical items but also intangible assets and rights that serve your business permanently and are not intended for short-term consumption. Properly recording and depreciating these assets is crucial to benefit from tax advantages and ensure correct accounting. This article explains the rules for fixed assets, how depreciation works, and any special regulations.
What are fixed assets?
Fixed assets are all assets of your company that:
Serve your business permanently,
Are independently valued and transferable,
Are financed by the business owner, and
Remain in the company for more than one year.
Types of Fixed Assets:
Tangible and intangible assets
Movable and immovable assets
Depreciable and non-depreciable assets
Depreciation (AfA) of Fixed Assets
Acquisition costs for fixed assets generally cannot be immediately deducted as operating expenses. Instead, depreciation occurs over the asset's useful life.
Depreciable Fixed Assets
Some assets lose value over time. Examples include:
Business vehicles
Computers
Buildings
The useful life is determined by official AfA tables. Deviations are only allowed in justified individual cases.
Examples of Useful Life:
Camera: 7 years
Office furniture: 13 years
New cars: 6 years
We help determine whether an item qualifies as a fixed asset and calculate the correct depreciation.
Depreciation Thresholds
The inclusion of an asset in the fixed assets depends on its acquisition or production costs. These costs not only include the purchase price but also all expenses necessary to bring the asset into use (e.g., transport, installation costs).
Depreciation Thresholds:
Low-Value Asset (GWG) – Purchase price up to €250.00 net (gross for small businesses): No inclusion in fixed assets, immediately deductible as an operating expense.
Low-Value Asset (GWG) – Purchase price from €250.01 to €800.00 net (gross for small businesses): Included in fixed assets, immediately depreciable. Examples: Office phones, office chairs, tools.
Purchase price above €800.01 net (gross for small businesses): Included in fixed assets, depreciation over the useful life.
Example Calculation:
Camera purchased on 01.03.2023 for €1,071.00 gross.
Net value: €900.00 (gross for small businesses)
VAT: €171.00 (standard taxation)
Useful life: 7 years
Annual depreciation: €900.00 / 7 years = €128.57
Depreciation for the first 10 months: €107.14
Special depreciation for computers and software (since 01.01.2021)
Since 2021, computers and software can be fully depreciated immediately, regardless of price, for:
Computers
Laptops (>9 inches)
Tablets
Peripheral devices (mouse, keyboard, printer, scanner, headsets, speakers, hard drives, USB sticks)
Non-Depreciable Fixed Assets
These are assets that do not lose value, such as:
Land
Financial assets (e.g., securities)
Non-depreciable assets are valued at their acquisition cost and are not subject to depreciation.
List of Fixed Assets
A List of Fixed Assets is a record of all long-term assets owned by your company. This includes assets such as machinery, vehicles, and office equipment. The list will include key information such as:
Acquisition costs
Useful life
Depreciation
If you are self-employed and calculate your profit using the income surplus calculation (EÜR), you are legally required to maintain a List of Fixed Assets.
Why is it Important?
To correctly calculate depreciation and claim it for tax purposes.
As proof for the tax office.
To document the book value of your assets for your tax return.
Helps you keep track of your fixed assets and investments.
Required Information in the List of Fixed Assets:
Acquisition Costs: The initial cost to acquire or produce the asset, including transport costs.
Depreciation Period: The asset's useful life, typically based on the AfA tables.
Book Value: The current value of the asset after accounting for depreciation.
Acquisition Date: The date the asset was transferred to your company.
Selling Fixed Assets
If you want to sell a fixed asset, such as an old laptop, there are two possible options:
Business Sale: If you sell the laptop for business purposes, the sales proceeds are considered business income, and you must charge VAT (19%) if you are VAT liable.
Private Sale: For private sales:
Transfer from fixed assets to private assets: The laptop is transferred from business to personal use, and its market value is added to your business income.
VAT: If you claimed VAT on the laptop, you must pay VAT on the transfer value (19% of the market value). You can then sell the device privately without VAT.
Contributing Fixed Assets from Private Assets
You can also transfer personal assets into your business. For example, if you, as a new entrepreneur, use your private laptop mainly for business purposes.
Partial Value: This is the market value of the asset at the time of transfer. For instance, you estimate the value of your used laptop. A higher value increases your depreciation volume, enabling you to benefit from immediate depreciation.
How to Determine Partial Value:
Get confirmation from a retailer or look for an up-to-date offer for the same device online (e.g., on classified ads, ReBuy, etc.).
Need Help with Fixed Assets?
For our clients:
You can always contact us at kontakt-team@smarta-steuern.de or book a consultation here – we’re here to help!
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