Depreciation, income tax, and hardship compensation

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 sum as depreciation in the first year) is possible, but no special depreciation (20% distributed arbitrarily over the first 5 years), because the latter only applies with less than 10% self-consumption.

(2) As long as the income-excess calculation (EÜR) results in less than €410 profit, no income tax has to be paid on the profit due to the hardship compensation. (EÜR = feed-in tariff + non-cash benefit from self-consumption through withdrawal depreciation - insurance - VAT on self-consumption - maintenance - repair)

(3) If I manage to calculate a loss in the first year through the investment deduction amount, I can deduct it from taxes.

Thus, the following depreciation seems optimal to me:

1st year (investment deduction amount)
=>
Revenue from the system: €1000
Depreciation 40% * 12,500 = €5000
Incidental costs (VAT, insurance, maintenance, ...): €200
=>
Loss of €4200
Tax saving: 42% * €4200 = €1764

2nd-20th year
Revenue from the system: €1000
Depreciation 1/19 of the remaining €7,500 = ~ €400
Incidental costs (VAT, insurance, maintenance, ...): €200
=> profit of €400
no tax deductions because below €410

Is my line of reasoning coherent?

Best regards

jx7

Corrections:

(1) It must be "Härteausgleich" and not "Härtefallausgleich."

(2) The investment deduction amount must be claimed in the year before commissioning.

Corrected depreciation variant:

Year 0 (investment deduction amount)
=>
Depreciation 40% * 12,500 = €5,000
=>
Tax savings: 42% * €5,000 = €2,100

Years 1-20
Revenue from the system: €1,000
Depreciation 1/20 of the remaining €7,500 = €375
Incidental costs (sales tax, insurance, maintenance, ...): €225
=> Profit of €400
no tax deductions because under €410

Is this chain of thought plausible?

Don't take it personally, but this type of question(s) would be better placed in the [Photovoltaic Forum]. They specialize in the depth and intensity of your questions. Have you already signed an offer or are you still researching?

These questions are especially well placed with a tax advisor.

Regarding 1, I can share my experience with you:

Only those who have a corresponding "business" can create the IAB. But since you simply have "no business" in the year before the acquisition, namely no photovoltaic system, you cannot create an IAB. Why would you? There would have to be profits that you want to reduce.

And regarding 2:
No one cared. No one was bothered by the 20% in the first year (however, I did not know the rule because of self-consumption, and the tax advisor did not care either).

I stick to it: Just do it... it won’t kill you.

"Doing" is already decided and commissioned. At the end of April, 33x300 kWp Heckert Full Black, Novotegra frame Black & SMA STP 8000TL-20 will arrive. Now the question is how to best handle it for tax purposes.

You mean Sonder-afa would work, but investment deduction would not? I have read that differently.

To be honest, I have no time and no desire to look up any sources for you right now, as I am actually busy with other things.

But I am happy to try again:

You want to acquire photovoltaic systems in 2018. So, the IAB must be formed at the latest in 2017. Did you register a "Stromerzeugungsgewerbe" (electricity generation business) in 2017 or do you have to file an appropriate tax return (even without business registration)? Yes? Did you make a profit in 2017 corresponding to the planned IAB? Yes? Great, then it will certainly work (and also makes logical sense).

If not, it will fail exactly because of that. What profit do you want to reduce with the IAB if there is none?

Have you actually understood the purpose of an IAB? It is solely about shifting investment costs to another calendar year. This saves taxes by shifting profits in a "profitable" year for investments in a "less profitable" year. This reduces the tax burden or spreads it more evenly. You only save if a lower marginal tax rate applies in one year than in the year of formation.

But that is also a matter for a tax advisor.

Regarding the special depreciation... that was my tax advisor. It worked, but I am out on the details.