An entrepreneur may write off a maximum of 20% of the acquisition or production costs of business assets each year. This percentage applies to the costs excluding VAT, unless the VAT cannot be reclaimed. In most cases, this rule ensures that the depreciation is spread over a longer period.
Depreciation and car expenses
An entrepreneur purchases a laptop, tablet and accessories for €2,934, excluding VAT (€3,551 including VAT). In his tax return, he claims €3,551 in depreciation expenses. The tax inspector adjusts this amount in the final assessment. Following an appeal, the tax inspector allows €711 (20% of €3,551) in depreciation costs.
Maximum depreciation
The business owner claims that he is entitled to a higher depreciation allowance. However, the court considers that the basis for depreciation is €2,934 excluding VAT, as the business owner has claimed back the VAT on the computer costs. The maximum annual depreciation amounts to 20% of that sum, which works out at €587. The tax inspector had already allowed €711 in depreciation costs during the objection phase, which is therefore already higher than the amount permitted by law.