Tax innovations 2023

Investment allowance

The investment allowance of 10% or 15% (in the area of greening) of the acquisition or production costs can be claimed under certain conditions for acquisitions or production of depreciable fixed assets after 31 December 2022.

Low-value assets

As of 2023, the limit for immediate depreciation of low-value assets (GWG) has been raised from  800 to 1,000 euros. In the business sector, the change applies for the first time to financial years beginning after 31 December 2022.

Increase in the turnover limit - small business lump sum taxation

Under certain conditions, small entrepreneurs have had the option of determining their operating expenses on a flat-rate basis since 2020. The flat-rate operating expenses amount to 45% of the operating income, up to a maximum of 18,900 euros, or 20% in the case of a service business, up to a maximum of 8,400 euros. The profit is calculated from the operating income less the flat-rate operating expenses (45% or 20%) and the contributions to the compulsory insurance.
A prerequisite for claiming the small entrepreneur:s flat rate is that the VAT exemption is applicable. As of 2023, the amount relevant for the flat rate has been increased by 5,000 euros. The turnover limit is now 40,000 euros.

Reduction of the third income tax bracket

After the second income tax bracket has already been reduced from 35% to 30% (with a full-year mixed tax rate for 2022 of 32.5%) as of 1 July 2022, the third bracket will be reduced from 42% to 40% (with a full-year mixed tax rate for 2023 of 41%) as of 1 July 2023. In addition, the abolition of the cold progression will lead to an increase in the respective tax brackets as of 1 January 2023.

Reduction of the corporate income tax rate

From the calendar year 2023, the corporate income tax rate will be reduced from 25% to 24%.
We will be happy to advise you personally on the tax advantages that will result for you from the change in 2023.