Investment allowance may cost the investment deduction amount

Because the investment allowance increases the business assets, it can lead to the limit amount for the investment deduction being exceeded in the case of balance sheet accountants.

It is true that the investment allowance has now expired and can no longer be claimed for new investments since 2014. However, for investments started before 2014, the allowance may mean that no investment deduction can be claimed. The Federal Fiscal Court sees the allowance as an increase in business assets. Although the allowance is tax-free, it must be taken into account in the balance sheet and can thus raise the business assets above the threshold amount that applies to the deduction amount. In the case of an income statement, the situation is different, because the allowance does not increase the profit that determines the entitlement to the deduction amount.