AfA (depreciation)

For straight-line AfA you divide the purchase or production cost by the useful life in years and deduct the same amount every year. Incidental costs such as assembly or installation are part of the cost. Input VAT you can deduct is not; if you cannot deduct it, for example as a small business, you use the gross amount (§ 6 Z 11 EStG).

If you use the asset for more than six months in the financial year, you deduct the full annual amount, otherwise half (§ 7 Abs. 2 EStG). Example: you put office furniture costing EUR 2,400 net into use in September and assume a ten-year life. You deduct EUR 120 in the first year, EUR 240 in each of the next nine years and the remaining EUR 120 in year eleven.

You estimate the useful life from experience in your business; for office and business equipment, the Austrian business service portal (USP) calls ten years usual. The law fixes some values: at least eight years for passenger and estate cars, 15 years for purchased goodwill in a trade, up to 2.5 % a year for business buildings without proof and 1.5 % for buildings let for housing. For passenger and estate cars, only cost up to EUR 40,000 including VAT and NoVA (the Austrian vehicle registration tax) is generally treated as reasonable for tax purposes (PKW-Angemessenheitsverordnung).

For assets acquired since 1 July 2020 you can choose declining-balance AfA instead: a fixed rate of at most 30 % of the remaining book value (§ 7 Abs. 1a EStG). Excluded are, among others, buildings, cars that are not zero-emission, used assets and installations for fossil fuels. You may switch from declining-balance to straight-line at the start of a financial year, but not the other way round.

Low-value assets costing up to EUR 1,000 each can be deducted immediately as a business expense (§ 13 EStG). The limit applies to financial years from 2023; before that it was EUR 800. With input VAT deduction the net amount counts, as a small business without deduction the gross amount. Parts that only work together count as one asset. The immediate write-off does not apply to assets you rent out.

If you use cash-basis accounting, you keep an asset register with acquisition date, cost, supplier name and address, expected useful life, annual AfA and remaining book value (§ 7 Abs. 3 EStG). AfA starts when you use the asset in the business, even if you have not paid for it yet. Low-value assets are deducted in the year of payment under cash-basis accounting.