Calculate linear or declining-balance depreciation schedules for business assets (Absetzung fur Abnutzung).
| Year | Depreciation | Book Value |
|---|---|---|
| 1 | 10.000,00 € | 40.000,00 € |
| 2 | 10.000,00 € | 30.000,00 € |
| 3 | 10.000,00 € | 20.000,00 € |
| 4 | 10.000,00 € | 10.000,00 € |
| 5 | 10.000,00 € | 0,00 € |
What is AfA (Absetzung fur Abnutzung)?
AfA is the German term for tax depreciation. Businesses can deduct the cost of assets over their useful life, reducing taxable income each year. The useful life is defined in the official AfA tables published by the Federal Ministry of Finance (BMF).
When can I use declining balance depreciation?
Declining balance (degressive) depreciation was reintroduced for movable assets acquired after 31 March 2024, at up to 20% (max 2x the linear rate). For assets acquired in 2025, this applies to movable fixed assets. Buildings generally use linear depreciation (2-3% depending on type and age).
What are the GWG (low-value assets) rules?
Assets costing up to EUR 800 net (GWG - geringwertige Wirtschaftsguter) can be fully expensed in the year of purchase. Assets between EUR 250 and EUR 1,000 can alternatively be pooled and depreciated over 5 years. This provides immediate tax relief for small purchases.
Disclaimer: These calculations are estimates based on 2025 German tax rules and should not be considered professional tax advice. Consult a Steuerberater for your specific situation.
How Absetzung für Abnutzung works, depreciation periods, and special write-offs
What is AfA and why does it matter?
AfA stands for Absetzung für Abnutzung — it means you spread the cost of a business asset over its useful life instead of deducting everything in year one. A €12,000 machine depreciated over 6 years gives you €2,000 in deductions each year. This reduces your taxable profit and therefore your income tax or corporate tax bill every year.
How long do common business assets need to be depreciated?
The Finanzamt publishes AfA-Tabellen with standard useful lives. Computers and laptops: 3 years. Office furniture: 13 years. Cars: 6 years. Office buildings: 33 years (3% per year). Software: 3 years. Mobile phones: 5 years. These periods are fixed — you cannot choose a shorter or longer period without a special reason.
What is the GWG rule for low-value assets?
Assets costing up to €800 net (without VAT) are classified as geringwertige Wirtschaftsgüter (GWG) and can be fully deducted in the year of purchase. A €750 tablet is written off immediately. For assets between €250 and €1,000, you can alternatively use a Sammelposten (pool) and depreciate them over 5 years regardless of type.
What are Sonderabschreibungen (special depreciation)?
Small businesses with net assets below €235,000 can claim a Sonderabschreibung of up to 20% of the asset cost in the first 5 years, on top of normal depreciation. For a €30,000 vehicle, you could deduct an extra €6,000 in the first year. Combined with normal AfA of €5,000, your first-year deduction becomes €11,000 instead of just €5,000.
How does depreciation work for buildings?
Residential buildings built after 1924 are depreciated at 2% per year (50-year life). Buildings completed from 2023 onwards can use 3% per year (33-year life). Commercial buildings use 3% per year. Only the building is depreciated — the land cannot be depreciated. For a property worth €300,000 with 30% land value, you depreciate €210,000 at €6,300 per year (3%).
What is the Investitionsabzugsbetrag (IAB)?
The IAB lets small businesses deduct up to 50% of the planned cost of a future investment before they buy it. If you plan to buy a €20,000 machine next year, you can deduct €10,000 this year already. The business must have net assets below €235,000. You have three years to make the investment, or the deduction is reversed with interest.
Bundesfinanzministerium-Aligned: Based on 2025 Bundesfinanzministerium rates and thresholds. For personal advice, speak to a qualified Steuerberater (tax adviser).
Disclaimer: This calculator provides estimates based on current German tax rates and thresholds for the 2025 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified tax adviser before making financial decisions. Read our terms
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