To reduce bureaucracy, the coalition agreed yesterday (as of 07 March 2017) to raise the threshold for so-called low-value assets (geringwertige Wirtschaftsgüter, GwG).
Under the current rules, only assets whose acquisition costs do not exceed EUR 410 may be written off in full in the year of acquisition (so-called immediate depreciation). They do not have to be spread over their useful life and do not have to be recorded in a fixed-asset register. This EUR 410 threshold has now been raised to EUR 800. This means that, in future, acquisitions (such as writing implements, tablets, office supplies, office furniture, smaller trade materials, etc.) up to a value of EUR 800 may be depreciated immediately.
As a result, the recording obligations will also no longer apply to many assets going forward.
The increase is scheduled to take effect on 01 January 2018.
Source: BMWi online, press release of 07 March 2017
http://www.bmwi.de/Redaktion/DE/Pressemitteilungen/2017/20170307-zypries-zu-gwg.html
Frequently asked questions
Frequently asked questions
What are low-value assets (geringwertige Wirtschaftsgüter, GwG)?
Low-value assets are depreciable, movable, and independently usable fixed assets whose acquisition or production costs do not exceed a specified threshold. They may be fully written off as a business expense in the year of acquisition, without being depreciated over their useful life. Typical examples include writing instruments, tablets, office supplies, office furniture, or small tools.
What is the new threshold for the immediate write-off of low-value assets (GwG)?
The threshold for low-value assets (geringwertige Wirtschaftsgüter) has been raised from the previous EUR 410 to EUR 800. As a result, acquisitions with a net value of up to EUR 800 can be fully written off in the year of acquisition. The new rule takes effect on 01/01/2018.
Which record-keeping obligations are eliminated under the GwG rule?
Low-value assets that are written off immediately do not need to be tracked in a separate fixed asset register. With the threshold raised to EUR 800, these record-keeping obligations no longer apply to significantly more assets, which primarily relieves mid-sized businesses and skilled trades.
From when does the new EUR 800 threshold for low-value assets apply?
The increase of the threshold for low-value assets (GwG) from EUR 410 to EUR 800 takes effect on 01/01/2018. For acquisitions made before this date, the previous threshold of EUR 410 continues to apply. The decisive factor is the date of acquisition or production of the asset.
What is the objective of raising the GwG (low-value asset) threshold?
Raising the GwG threshold primarily serves to reduce bureaucracy and ease the tax burden on SMEs and skilled trades businesses. Immediate write-off simplifies bookkeeping, as fewer assets need to be depreciated over several years and tracked in the fixed asset register.