Under civil law, depreciable assets must be depreciated as soon as they are ready for use. The distribution is made over the expected useful life.
For tax purposes, the Income Tax Consolidation Act determines the extent to which depreciation is deductible as a business expense:
Since commercial and under tax law regulations can differ, temporary differences between the commercial and tax balance sheets often arise.
The depreciation rates permitted for tax purposes are taken from the depreciation tables. These tables differentiate between industries and types of assets and specify a maximum rate per year.
Key points in practice:
Tangible capital goods, investment goods, fixed assets
Typical examples:
Depreciation begins in the financial year in which the asset is ready for use and is calculated using the maximum rates specified in the tables.
Intangible capital goods, investment goods, fixed assets
Typical examples:
Special tax limits often apply to intangible assets, e.g.:
The following depreciation methods are permitted and commonly used in practice:
Plausibility, documentation, and consistent application are crucial for tax recognition.
Depreciation has both accounting and tax implications:
For tax purposes, depreciation reduces the tax base for corporate income tax and regional taxes, within the permissible limits. For more detailed information, please refer to our glossary entries on corporate income tax and personal income tax.
1. When can I start depreciation on a new asset?
From the financial year in which the asset is ready for use. The delivery date is not decisive.
2. Do I always have to depreciate at the maximum rates in the tables?
No. The tables set tax limits. Under commercial law, a different economically justified
expected useful life can be applied.
3. What happens if I depreciate more than is permitted for tax purposes?
The commercial balance sheet remains unchanged. For taxes, the excess amount is corrected
off-balance sheet and is only deductible in later years.
4. Can low-value assets be depreciated immediately?
Yes, immediate depreciation is possible up to a value of €516.46 per asset.
5. How is intangible assets such as software depreciated?
Fixed tax rules apply to intangible assets, e.g., limited maximum rates or prescribed expected useful lives.
Under commercial law, a realistic, different expected useful life can be chosen.