The great mysteries of life include the theory of relativity, the offside rule and, unfortunately, German tax law.

And if abbreviations are also used for the latter and you don't even understand the station anymore, then our initiative KTFKK - the „Klartext für Kanzleikürzel“ (plain language for law firm abbreviations) will help you.

Today with: AfA.

But the most important thing first: Unfortunately, AfA does not mean depreciation for everything. That would be too nice.

Rather, the abbreviation stands for „deduction for wear and tear“.

What is it all about? A philosopher would say: Everything in life is transient. And your tax advisor would add: Especially depreciable fixed assets.

Depreciation is the tax depreciation of assets that wear out over time - in other words, the perishable items in your business assets. You can gradually claim their acquisition or production costs: over their „normal useful life“.

Would you like an example?

Your company car loses a little value with every journey. According to the tax office, such a car lasts 6 years. This means you can deduct 1/6 of the purchase price from your tax bill each year.

Depreciation therefore reduces your profit and thus your tax burden

But beware: when it comes to depreciation, it's not just that you depreciate - but how!

This is because there are different types of depreciation, and which one is best for you depends on your individual case.

It's best to talk to us. 😊

👉 Do you have any questions? We speak plain language. We are happy to assist you and help you with your tax questions and concerns: www.wsb-berater.com/kontakt

#AfA #Law firm abbreviation #Clear text #Tax consultancy #WSB