Purchase of a business concept
November 19, 2010 | 35,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
I bought a business idea from someone in 2008. He had developed a special mat for cat litter boxes and had already sold some of these parts. Now I have essentially acquired the already manufactured samples, a product description, and the unlimited distribution rights for the product from him, even though there was actually no protection for the product. I only later applied for a patent for the part and incurred costs with a lawyer for that.
Purchase of idea 9,900.00
Costs of patent attorney 1,032.50
Registration with DPMA 40.00
Other legal fees, drafting application 578.05
Legal and consulting costs 527.50
Drafting utility model application 500.00
Legal and consulting costs 350.00
I naturally included all the costs in other operating expenses. Now the tax office, as part of a tax audit, says that the costs do not belong to the expenses and must be capitalized as an intangible asset.
I can't believe it! Can this really be true? How can I include the costs for the concept purchase in the expenses?
Dear inquirer,
Thank you for your inquiry, which I would like to answer based on your information and in the context of your situation in a preliminary consultation as follows:
First, check if the income tax assessment for 2008 is provisional under section 164(1) of the Tax Code (I do NOT mean the provisional note under section 165 of the Tax Code). The assessment must state that it is provisional under section 164(1) of the Tax Code. According to this provision, the assessment could be amended at any time.
If the assessment does NOT include a note regarding the provisional assessment under section 164 of the Tax Code and is also not provisional regarding self-employed income, then the tax office could amend the assessment under section 173 of the Tax Code based on new facts. If you explained the "other operating expenses" item when submitting the profit determination along with the tax return, then it is not a new fact but a change in the tax office's legal opinion, which does not constitute a new fact. The assessment could not be changed to your detriment in this case.
You have acquired a trademark, which needs to be capitalized as an intangible asset in the amount of €9,900 (net amount without sales tax if you are a regular taxpayer for sales tax) and depreciated over 15 years unless you can prove a shorter useful life.
Expenses related to intangible assets are operating expenses. These are in addition to the costs you mentioned of €9,900.
You must have these matters reviewed by a tax advisor. If you are interested, you can contact me at my email address StillerStB@gmx.de.
I hope I could be of assistance.
Kind regards,
Ulrich Stiller
Tax Advisor/Dipl. Business Economist
