Hello everyone,
Are the following statements correct?
(1) For a 10 kWp photovoltaic system with about 20% self-consumption, an investment deduction (40% of the investment amount as depreciation in the first year) is possible, but no special depreciation (20% spread freely over the first 5 years), since the latter only applies with less than 10% self-consumption.
(2) As long as the profit from the income-expenditure calculation (EÜR) is less than €410, no income tax has to be paid on the profit due to the hardship compensation. (EÜR = feed-in tariff + non-cash benefit from own consumption - depreciation - insurance - VAT on own consumption - maintenance - repairs)
(3) If I manage to calculate a loss in the first year using the investment deduction amount, I can offset it against tax.
Therefore, the following depreciation appears optimal:
1st year (investment deduction amount)
=>
Revenue from the system: €1000
Depreciation 40% * €12,500 = €5000
Additional costs (VAT, insurance, maintenance, etc.): €200
=>
Loss of €4200
Tax savings: 42% * €4200 = €1764
Years 2–20
Revenue from the system: €1000
Depreciation 1/19 of the remaining €7,500 = ~ €400
Additional costs (VAT, insurance, maintenance, etc.): €200
=> Profit of €400
No tax deductions, because below €410
Is my line of thought coherent?
Best regards
jx7
Are the following statements correct?
(1) For a 10 kWp photovoltaic system with about 20% self-consumption, an investment deduction (40% of the investment amount as depreciation in the first year) is possible, but no special depreciation (20% spread freely over the first 5 years), since the latter only applies with less than 10% self-consumption.
(2) As long as the profit from the income-expenditure calculation (EÜR) is less than €410, no income tax has to be paid on the profit due to the hardship compensation. (EÜR = feed-in tariff + non-cash benefit from own consumption - depreciation - insurance - VAT on own consumption - maintenance - repairs)
(3) If I manage to calculate a loss in the first year using the investment deduction amount, I can offset it against tax.
Therefore, the following depreciation appears optimal:
1st year (investment deduction amount)
=>
Revenue from the system: €1000
Depreciation 40% * €12,500 = €5000
Additional costs (VAT, insurance, maintenance, etc.): €200
=>
Loss of €4200
Tax savings: 42% * €4200 = €1764
Years 2–20
Revenue from the system: €1000
Depreciation 1/19 of the remaining €7,500 = ~ €400
Additional costs (VAT, insurance, maintenance, etc.): €200
=> Profit of €400
No tax deductions, because below €410
Is my line of thought coherent?
Best regards
jx7
Corrections:
(1) It must be "hardness compensation" instead of "hardship compensation."
(2) The investment deduction amount must be claimed in the year before commissioning.
Corrected depreciation model:
Year 0 (investment deduction)
=>
Depreciation 40% * 12,500 € = 5,000 €
=>
Tax savings: 42% * 5,000 € = 2,100 €
Years 1–20
Return from the system: 1,000 €
Depreciation 1/20 of the remaining 7,500 € = 375 €
Additional costs (VAT, insurance, maintenance, etc.): 225 €
=> Profit of 400 €
No tax deductions because it is below 410 €
Is this line of thought consistent?
(1) It must be "hardness compensation" instead of "hardship compensation."
(2) The investment deduction amount must be claimed in the year before commissioning.
Corrected depreciation model:
Year 0 (investment deduction)
=>
Depreciation 40% * 12,500 € = 5,000 €
=>
Tax savings: 42% * 5,000 € = 2,100 €
Years 1–20
Return from the system: 1,000 €
Depreciation 1/20 of the remaining 7,500 € = 375 €
Additional costs (VAT, insurance, maintenance, etc.): 225 €
=> Profit of 400 €
No tax deductions because it is below 410 €
Is this line of thought consistent?
T
toxicmolotof20 Mar 2018 20:06These questions are best addressed by a tax advisor.
Regarding point 1, I can share my experience:
You can only create the IAB if you have the corresponding "business." Since you simply don’t have a business in the year before the acquisition—specifically no photovoltaic system—you cannot create an IAB. After all, there would have to be profits that you want to reduce.
And regarding point 2:
No one cared. No one objected to the 20% in the first year (although I didn’t know the rule about self-consumption, and my tax advisor didn’t care either).
My advice remains: Just do it... it won’t kill you.
Regarding point 1, I can share my experience:
You can only create the IAB if you have the corresponding "business." Since you simply don’t have a business in the year before the acquisition—specifically no photovoltaic system—you cannot create an IAB. After all, there would have to be profits that you want to reduce.
And regarding point 2:
No one cared. No one objected to the 20% in the first year (although I didn’t know the rule about self-consumption, and my tax advisor didn’t care either).
My advice remains: Just do it... it won’t kill you.
"Doing it" is already decided and commissioned. At the end of April, 33 x 300 kWp Heckert Full Black panels, Novotegra Black mounting systems, and SMA STP 8000TL-20 inverters will arrive. Now the question is how to handle it best from a tax perspective.
You mean special depreciation allowance would apply, but investment deduction allowance not? I have read differently about that.
You mean special depreciation allowance would apply, but investment deduction allowance not? I have read differently about that.
T
toxicmolotof20 Mar 2018 20:50To be honest, I don’t have the time or energy right now to look up any sources for you, as I’m actually busy with other things.
But I’ll try again:
You want to install a photovoltaic system in 2018. The investment deduction must therefore be established by 2017 at the latest. Did you register a “power generation business” in 2017, or do you need to file a relevant tax return (even without a business registration)? Yes? Did you make a profit in 2017 equal to the planned investment deduction? Yes? Great, then it should work (and it also makes logical sense).
If not, that’s exactly where it will fail. What profit do you want to reduce with the investment deduction if there isn’t any?
Do you actually understand the purpose of the investment deduction? It is solely about shifting investment costs into a different calendar year. This saves taxes by reallocating profits from a “high-profit” year to investments in a “low-profit” year. This way, you reduce or smooth out your tax burden. You only gain a tax advantage if the marginal tax rate is lower in one year than in the year the deduction is established.
But this is also a topic for a tax advisor.
Regarding the special depreciation... that was handled by my tax advisor. It worked, but I’m not involved in the details.
But I’ll try again:
You want to install a photovoltaic system in 2018. The investment deduction must therefore be established by 2017 at the latest. Did you register a “power generation business” in 2017, or do you need to file a relevant tax return (even without a business registration)? Yes? Did you make a profit in 2017 equal to the planned investment deduction? Yes? Great, then it should work (and it also makes logical sense).
If not, that’s exactly where it will fail. What profit do you want to reduce with the investment deduction if there isn’t any?
Do you actually understand the purpose of the investment deduction? It is solely about shifting investment costs into a different calendar year. This saves taxes by reallocating profits from a “high-profit” year to investments in a “low-profit” year. This way, you reduce or smooth out your tax burden. You only gain a tax advantage if the marginal tax rate is lower in one year than in the year the deduction is established.
But this is also a topic for a tax advisor.
Regarding the special depreciation... that was handled by my tax advisor. It worked, but I’m not involved in the details.
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