The investment deduction amount pursuant to § 7g EStG enables businesses to bring forward the tax benefit of planned investments. We explain the requirements and show you how to use this instrument to its full potential.
The Investment Deduction Amount as a Planning Tool
The investment deduction amount (IAB) pursuant to § 7g EStG is one of the most effective tax planning instruments available to small and medium-sized enterprises. It allows up to 50 per cent of the anticipated acquisition or production costs to be deducted from profits even before the investment is made.
Requirements
Eligible Businesses
The IAB is available to taxpayers whose profit in the year of formation does not exceed 200,000 euros. This profit threshold applies uniformly across all income categories and legal forms.
Eligible Assets
The IAB may be formed for the planned acquisition of movable fixed assets. The asset must be acquired within the following three years and used almost exclusively for business purposes (private use below ten per cent).
Amount and Calculation
Maximum Deduction Amount
The IAB amounts to up to 50 per cent of the anticipated acquisition costs. The upper limit is 200,000 euros per business for all IABs formed and not yet reversed.
Interaction with Special Depreciation
In addition to the IAB, special depreciation allowances of up to 40 per cent may be claimed in the year of acquisition pursuant to § 7g Abs. 5 EStG. Regular depreciation runs in parallel.
Practical Example
A business owner plans to acquire a commercial vehicle for 60,000 euros net in 2026. In 2025, an IAB of 30,000 euros can be claimed as a profit-reducing deduction. At a personal tax rate of 42 per cent, this yields an immediate tax saving of approximately 12,600 euros.
Risks and Reversal
Three-Year Investment Period
If the investment is not carried out within three years, the IAB must be reversed. This results in additional tax payments and interest pursuant to § 233a AO.
Change of Use
If the asset is sold within the three-year period or business use falls below 90 per cent, the IAB must likewise be reversed.
Strategic Use
Profit Management
The IAB is ideally suited for active profit management. In particularly profitable years, planned investments can be brought forward to smooth the tax burden.
Start-ups
Start-up founders may also use the IAB, provided the investment intention is credible. This can significantly improve liquidity during the critical start-up phase.
Conclusion
The investment deduction amount is a powerful tax planning instrument. Its effective use requires forward-looking planning and careful documentation. Our tax advisors at compleneo help you integrate the IAB optimally into your investment and tax planning.
