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GWG / Investment Allowance Can you please let me know how much the GWG / Investment Allowance is for this investment?

March 11, 2011 | 30,00 EUR | answered by Dipl.BW/SB Ulrich Stiller

Hello,

I have a question regarding the depreciation of low-value assets (GWG) in the accounting (income statement) of a sole proprietor.

Situation/Goal: Planned purchase of a new PC and its classification as a GWG, so that it becomes fully effective in the year of acquisition.

An old PC (completely written off) is too slow and needs to be replaced with a new one, the old monitor still works well and will be reused. There are no other peripheral devices (except mouse and keyboard).

The PC itself costs less than 415 euros net, but (without the monitor) is not "independently usable." Do I have to activate it and depreciate it over 3 years, or what are the chances of creating a GWG by connecting the old monitor to the new PC, creating an independently usable asset? (Which also corresponds 100% to the operational reality.)

Further question regarding the investment deduction allowance: If I set aside an investment deduction allowance of 270 euros in the previous year for the purchase of a new computer system, and this new system then costs 680 euros. Is this system possibly a GWG? (since 680 euros - 270 euros = 410 euros, which is less than 415 euros)

Thank you for your response.

Dipl.BW/SB Ulrich Stiller

Dear customer,

Thank you for your inquiry, which I would like to answer based on your information and in the context of your commitment in a initial consultation as follows:

According to the Federal Fiscal Court ruling of 10.03.2004 VI R 91/00, a monitor is not considered a low-value asset (GWG) due to the lack of independent usability. Therefore, the monitor should be depreciated over a period of 3 years. On the other hand, you can treat the PC as a low-value asset (GWG) and depreciate it immediately, as the PC is not a peripheral device.

Regarding your second question: Yes, a low-value asset (GWG) is involved. By deducting the investment amount, a low-value asset (GWG) has been created according to § 7g para. 2 EStG, as the remaining amount does not exceed 410€. Therefore, immediate depreciation is possible.

I hope that my explanations have been helpful to you.

Best regards,

Ulrich Stiller
Tax consultant/Diplom Business Economist