Low-value assets: what you need to consider

When purchasing low-value assets, the entrepreneur can choose between 3 options (also under commercial law). If the entrepreneur is entitled to deduct input tax, the assets can be recognized at net acquisition or production cost as follows:

1. up to 250 €: Recognition as an immediate expense or as a „low-value asset“
2. from € 250 to € 800: to the account „Low-value assets“ or alternatively
3. for more than € 250 and less than € 1,000: to the account „Assets (collective item)“

Whether an asset is of low value depends on the amount of the acquisition or production costs and also on whether the assets are movable, depreciable and can be used independently (= on their own). The net acquisition or production costs excluding VAT may not exceed

• not over 800 € or.
• between € 250 and € 1,000 if they are to be placed in a collective item.

The net amount is always decisive, irrespective of whether the VAT can be deducted in full, partially or not at all as input tax.

Practical example:
A doctor who only carries out VAT-exempt transactions buys an office lamp for €800 plus 19% VAT of €152 (i.e. €952 gross). Consequence: As it is the net amount without VAT that counts, the doctor does not exceed the limit of €800. He can therefore immediately write off the amount of € 952 at € 100%, although the acquisition costs exceed the amount of € 800 due to the lack of input tax deduction.

When purchasing low-value assets, attention should be paid to detailed invoices. If an entrepreneur purchases various items, a detailed invoice must be issued, as this is the only way to document which item does not exceed the threshold. Note: If it is not possible to obtain a detailed invoice, the total amount can also be broken down according to sales documents (e.g. brochure with price details). These documents must be kept together with the invoice.

When assessing whether the threshold is exceeded, the purchase price alone is not decisive. The acquisition costs also include all expenses incurred by the entrepreneur in order to acquire the item.

• to acquire and
• into a condition ready for operation, such as transportation costs, packaging costs and assembly costs.

This does not include costs associated with payment, e.g. cash on delivery or reminder fees. If an entrepreneur orders several assets and pays a lump sum for transportation and packaging, he must distribute this proportionately across all assets. Discounts and rebates reduce the acquisition costs so that the reduced amount is decisive for the assessment. If the asset is purchased before the end of the year and only paid for in the new year with a discount deducted, this reduction in the purchase price no longer has an effect in the past year.

Practical example:
An entrepreneur purchases an asset for € 812 net at the end of December 2025 and does not pay the purchase price until 3.1.2026, deducting a 2% discount (= € 16.24). In 2025, the amount of € 812 is decisive. It is then not a low-value asset. The entrepreneur must depreciate the asset over its useful life or transfer it to the compound item.

If the entrepreneur has formed an investment deduction amount that is only permissible for tax purposes, this can lead to a reduction in acquisition and production costs, insofar as this is to be reversed in the investment year. For tax purposes, the entrepreneur must reverse the profit increase by deducting the investment deduction amount from the acquisition or production costs. The deduction of the investment deduction amount can result in low-value assets (for tax purposes only).