Multiple utilization of the maximum amount for investment deductions

A sole trader with several independent businesses can potentially utilize the maximum amount for investment deductions several times.

There is an annual maximum amount for the utilization of investment deductions, which is reviewed per company. If a sole trader runs two independent businesses, he can utilize the maximum amount separately for each business. The Düsseldorf Tax Court has now had to deal with the question of whether the owner of an old materials wholesale business runs a second business or whether there is a single business.

The plaintiff had previously inherited a scrap metal business from his mother, which was run at the same address but had separate business premises, accounts and bookkeeping as well as its own tax number. In this case, the tax court assumed a single business operation because the parts of the business not only operate from the same address, but also carry out similar activities and complement each other. The court also took other factors into account, but these led to the same result. The plaintiff lodged an appeal against the ruling with the Federal Fiscal Court.