Tax tips for the turn of the year: what online retailers should think about before the end of the year

So that you are well prepared for the turn of the year, we have some valuable tax tips for you.

Tip 1: Depreciate assets optimally

Machinery, operating and office equipment, hardware and software or vehicles wear out. This loss in value is recognized as a business expense for tax purposes via the depreciation allowance (Absetzung für Abnutzung, AfA). Even with investments that you make by the end of the year, you can still influence the profit for 2025. However, the expenses for the purchase are only fully deductible under certain conditions.

The principle is: depreciation must be pro rata temporis

As a rule, assets are depreciated over their useful life, e.g. company cars over 6 years or office equipment over 10 years. It should be noted that for 2025, only a pro rata depreciation of 2/12 or 1/12, i.e. for November and December or only for December, is permitted.

Degressive depreciation possible again

Depreciation in declining annual installments (declining-balance method) regularly allows higher depreciation amounts in the first few years. For movable fixed assets acquired or manufactured in the period from July 1, 2025 to December 31, 2027, the option of straight-line or declining-balance depreciation was again created for a limited period.

The declining balance method of depreciation is three times the straight-line method of depreciation and amounts to a maximum of 30 percent. However, declining balance depreciation will only be permitted pro rata temporis in 2025.

Depreciation of up to 75 percent possible for new e-cars

A new arithmetic degressive depreciation was introduced for newly acquired (pure) electric vehicles held as business assets in the period from July 2025 to December 2027. The following graduated rates apply:

75 percent in the year of purchase, 10 percent in the first subsequent year, 5 percent in the second, 5 percent in the third, 3 percent in the fourth and 2 percent in the fifth year.

This type of depreciation can only be applied if no special depreciation is claimed and includes all vehicles, regardless of their vehicle class.

Pro rata depreciation does not apply to purchases made during the year. This means that you can still take the full 75 percent depreciation into account when purchasing/commissioning up to December 31 of the current year to reduce profits.

Note:
In the case of leasing, there must be an actual transfer of ownership. If the economic ownership was already attributable to the lessee during the term of the lease, the subsequent takeover does not constitute a new acquisition, meaning that the 75% depreciation does not apply.

Special depreciation allow higher depreciation amounts

In the year of acquisition and the following four years, small and medium-sized enterprises can claim a special depreciation allowance of 40% in addition to the straight-line or declining balance method. The full 40 percent can also be claimed for an asset purchased in November or December of the year. The prerequisite for this is that the asset is used almost exclusively (at least 90 percent) for business purposes. In addition, your profit must not exceed 200,000 euros.

Write off hardware and software immediately

For various hardware and software, e.g. tablets, laptops or docking stations (but not cell phones!), the tax authorities have shortened the depreciation period to 1 year. This means that hardware and software purchased this year can be written off in full to a memo book value of EUR 1. This is even permissible for hardware and software purchased at the end of the year. The amount of the acquisition costs is irrelevant, so even high-quality technology can be fully expensed.

Low-value assets

Other assets (except hardware and software) can only be claimed immediately as operating expenses if their acquisition costs (excluding VAT) do not exceed EUR 800 and the depreciable asset acquired can also be used independently.

Investment deduction

Even if you only want to invest in the next three years, you can already claim profit-reducing deductions in 2025 - with the help of an investment deduction amount (IAB). You can create this in the amount of 50% of the expected acquisition or production costs of the asset. The maximum amount of the IAB is 200,000 euros. However, the prerequisite is that your company's profit does not exceed 200,000 euros.

Note:
For IAB formed in 2022, investments must be made by the end of 2025. Otherwise the IAB must be reversed retroactively. You should therefore check whether an investment in 2025 makes sense from a business and tax perspective.

Tip 2: Follow the 10-day rule and make the most of it

Small companies and freelancers may calculate their profit using a simplified EÜR. The decisive factor for the profit for 2025 is therefore whether the operating income has already been credited to the bank account or received in the cash register and whether payments for operating expenses have already been made. The taxable business profit can be reduced by deferring cash inflows to the following year and/or bringing forward cash expenses to December 2025. To control this, you can agree different payment terms with customers or suppliers, for example.

However, the so-called 10-day rule means that there is an important exception to the inflow and outflow principle. This applies to regularly recurring income and expenses that are received or paid shortly before or after the end of the year. The rule states that this income and expenditure is deemed to have been received in the financial year in which it was incurred if it is also due in this period. A short period is considered to be 10 days, i.e. payments between December 22 and January 10 of the following year.

On the expenditure side, for example, monthly VAT prepayments, rents, insurance premiums or loan interest are affected. On the income side, it is the regularly recurring income, such as annual payments for guarantee contracts or regular advance payments for maintenance contracts, which fall under the 10-day rule if the payments are also due within this period. The advance VAT payment for the month of December only falls under the 10-day rule if no permanent extension has been applied for.

Note:
However, if, for example, the annual premium for business liability insurance for 2026 is already paid on December 10, the entire amount can be recognized as an expense in 2025, because outside the 10-day period, the due date is not relevant, even for regularly recurring income or expenses, but only the inflow or outflow.

Tip 3: Is this art or can it go?

In order to reduce bureaucracy, the law stipulates that merchants only have to keep accounting documents for eight years instead of ten in accordance with commercial and tax regulations. Books and records, inventories, annual financial statements, management reports, opening balance sheets and documents relating to the customs code must be kept for ten years, accounting documents for eight years and other documents (commercial and business letters) for six years. Similarly, the VAT retention period for invoices, including e-invoices, has been adapted to the changed retention period.

Note:
The retention obligation for tax-relevant documents begins at the end of the calendar year in which the last entry was made in the respective business books or the accounting document was created. In exceptional cases, however, documents must be kept for longer, e.g. if the taxation procedure has not yet been completed due to a tax audit. In addition, permanently important documents should be archived for as long as they may be relevant for tax purposes (e.g. rental agreements, loan agreements, partnership agreements). And with all corona-related assistance, it is important to look closely at the retention periods for the notices and thus also for the documents on which they are based.