Deduct at once or spread the cost
Anything you use in your business for more than a year is a fixed asset. As a rule you don’t deduct its cost in the year you buy it but spread it as depreciation (Absetzung für Abnutzung, AfA) over the years you use it (section 7 (1) EStG). For cheaper purchases there are simplifications.
All limits are net, without VAT. That holds even if you deduct no input tax under the small business rule: a monitor for €940 gross is about €790 net and so below the €800 limit. What you deduct is then the gross amount, because for you the VAT is part of the cost.
| Net purchase cost | What you can do |
|---|---|
| up to €250 | deduct at once as a business expense |
| above €250 up to €800 | deduct at once as a low-value asset or put in the pool |
| above €800 up to €1,000 | put in the pool or depreciate over the useful life |
| above €1,000 | depreciate over the useful life |
Low-value assets up to €800
A low-value asset (geringwertiges Wirtschaftsgut, GWG) is a movable fixed asset you can use on its own that costs no more than €800 net. You may deduct it in full in the year of purchase (section 6 (2) EStG). The limit has applied since 2018 and is unchanged in 2026. A rise to €1,000 was in the draft of the Growth Opportunities Act (Wachstumschancengesetz) but was dropped in 2024.
Usable on its own means the item works by itself, like a desk chair or a camera. Low-value assets above €250 go into a list, unless your bookkeeping already shows the details.
The pool from €250 to €1,000
Instead of writing them off at once, you can put all assets of a year above €250 up to €1,000 net into a pool. The pool is released over five years at one fifth each (section 6 (2a) EStG), regardless of when in the year you bought. You make this choice for all assets of that size in a year at once.
For most freelancers the immediate write-off up to €800 is simpler. The pool mainly pays off if you buy many items between €800 and €1,000.
Straight-line depreciation with the AfA tables
Anything above that you depreciate in equal annual amounts over the normal useful life (section 7 (1) EStG). The AfA tables of the Federal Ministry of Finance say how long that is. They are not law, but tax offices follow them.
In the year of purchase, the month of purchase and every month after it count (section 7 (1) sentence 4 EStG). If you buy a device for €4,000 net with a five-year useful life in April, that is €800 a year, and in the first year 9 of 12 months: €600.
Computers and software: one year
For computer hardware including accessories and peripherals, and for operating and application software, the BMF letter of 22 February 2022 lets you use a useful life of one year. The tax authorities accept it if you deduct the full cost in the year of purchase, even for a purchase in December. Formally it is still depreciation, so the laptop still belongs in your asset register. You may also choose a longer useful life.
Declining balance from July 2025 to the end of 2027
The tax investment program of 2025 brought back declining balance depreciation. For movable fixed assets bought after 30 June 2025 and before 1 January 2028 you may deduct a fixed percentage of the remaining value each year: at most three times the straight-line rate and at most 30% (section 7 (2) EStG). You may switch to straight-line later (section 7 (3) EStG). For an asset with a ten-year useful life that is 30% instead of 10% in a full year. In the year of purchase, here too only the months from the purchase count.
Earlier windows still apply to their assets: anything bought from 2020 to 2022 can be depreciated at up to 25%, anything bought from 1 April to 31 December 2024 at up to 20%.
The investment deduction in brief
If you plan a larger purchase, you can deduct up to 50% of the expected cost in advance, provided your profit in the year of the deduction is no more than €200,000 (section 7g EStG). The purchase then has to follow by the end of the third business year after the deduction. Whether this is worth it is best settled with your tax advisor.
How depreciation enters your profit calculation is explained in the guide on the EÜR profit statement. This guide explains the rules in general and is not tax advice.
Common questions
Does the one-year rule apply to a phone too?
The BMF letter names computer hardware such as desktops, notebooks, tablets and peripherals. Whether a smartphone is included is not expressly settled. If it costs no more than €800 net, you deduct it at once as a low-value asset anyway.
What happens if I sell a fixed asset?
The sale price is business income. The remaining value not yet depreciated becomes a business expense in the same year. That is why the asset register also records disposals.
Do I need an asset register?
For the EÜR you report your fixed assets with their depreciation. For that you need a list with purchase date, cost, useful life and depreciation per year. It belongs to the year-end documents for your tax advisor.
I also use the laptop privately. What then?
Then you deduct only the business share. Estimate the private share realistically and write it down.