Caribbean Garlic Soup Recipe

The new flat tax

Introduction

Peter Burke, Attorney at Law , lecturer.

01/16/2008

This paper describes the new rules to the "low-value assets" to the corporate tax reform in 2008.

It is aimed at primarily at students and trainees in the taxation, in commercial areas (trade accounts) to all the teachers and professors who teach accounting or similar. Helpful is the article for those who must enter into business transactions practice or be recorded, whether they are surplus computer or use the "double accounting".

Although the new regulations on the CCA since 1.1.2008 are already in force, trainees or trainers little useful information about the details, as they are needed. The many descriptions on the Internet are vague, imprecise, sometimes wrong (even on the part of tax advisers). Important relationships are all not explained.

For teachers who are generally not tax professionals (exceptions are tax consultants who teach part time in adult education), is additionally the problem of how the issue could be presented quickly and clearly.

In this paper, I assume that prior knowledge of CCA are available, so I can focus on the new regulations.

The corporate tax reform in 2008

accordance with common practice in practice I use in this paper, the abbreviation for GWG in the Income Tax Act defined "low-value goods."

The rules were changed significantly by the corporate tax reform in 2008. The changes took effect on 1 January 2008.

The original text of the law is hard to find on the web. The best place is the website www.bundesgesetzblatt.de can find non-subscribers access a read only version in PDF format. A reference would be the side http://www.bgblportal.de/BGBL/bgbl1f/bgbl107s1912.pdf. This includes in the "Federal Law Gazette BGBl I No. 40, 17 August 2007" contained in the section on the Business Tax Reform Act, adopted in August 2007, entering into force on 1.1.2008.

This reform bill is not very helpful, it contains only the changes in the law, without explaining the context. Moreover, it is an article law, which instructs not the full text of the amended law, but only the changes to individual provisions of the Act. It reads something like this (here in the first section of the amendments to the Income Tax Act):

§ 6 (of the Income Tax Act, the author's note) is amended as

a) paragraph 1 No. 5 is amended as follows:

aa) in Buchsatabe a, after the word "is" a comma is inserted and deleted the word "or".

bb) Under b be the set of a abschließnde point replaced by a comma and then the word 'or' and the attached letter C:

"c) an asset within the meaning of § 20 para 2"

b) paragraph 2 is amended as follows:

....

Therefore, as usual, literature necessary to the scheme in the overall context prepared and explained. With the text of the reform law you can not work alone.

be

§ 6 paragraph 2 and 2 Income Tax Act shall be applied to assets which purchased after 31.12.2007, produced or raised in the business property (§ 52 paragraph 16, sentence 17 ITA):

Temporal application. On the year the company, it is therefore also not here.

The Income Tax Act in its new version
now is the result of the corrections, so the new full text of the Income Tax Act, prepared and published. You'll find the new version of the Income Tax Act (or applicable for 2008 version) eg on the Internet at

http://www.gesetze-im-internet.de/estg/__6.html

The distinction to the previous version pushes the literature with the addition nF (new version) from the old version by the addition aF (old version). The relevant provision for the GWG in § 6 paragraph 2 and 2 is included. § 6 of the Income Tax Act contains the entire depreciation system and therefore the rules on the (in practice, so-called) GWGs.

Extract from the Income Tax Act § 6 n. F.

2)

a

The acquisition or production cost or in accordance with paragraph 1 No. 5-6 in lieu thereof value of depreciable movable assets of fixed assets, an independent use are capable, in the year of acquisition, production, or deposit of the asset or the opening of the operation discontinued entirely as operating expenses if the acquisition or production cost, less an excluding VAT amount (§ 9b paragraph 1.), or under paragraph 1 No. 5 to 6 in lieu thereof for the individual asset value does not exceed 150 euros.

2

A commodity is a self-use is not valid unless it can be used for its intended purpose of operating only with other assets in fixed assets and in the context of use inserted assets are technically matched to each other.

3
This also applies if the asset can be separated from the operational use of context and inserted into a different commercial use context.
(2a)

a
For depreciable movable fixed assets, the separate use are capable, in the year of acquisition, production, or deposit of the asset or the opening operation, a single item form, if the acquisition or production cost less a excluding VAT amount (§ 9b paragraph 1), or in accordance with paragraph 1 No. 5-6 in lieu thereof for value the single asset 150 euros, but not exceed 1,000 euros.

2
The single item is in the marketing year of education and the next four financial years to resolve reduce profit with one-fifth.
3
separating from an asset within the meaning of sentence 1 of the operating capital of the compound item is not diminished.

The changes at a glance to the term "GWG" nothing has changed (see Official Journal, in print from 1914). It's about ^{"depreciable movable assets of fixed assets, an independent use are capable of "}

has changed, described coarse:

The limit from the current 410 euros was reduced to 150 €, all is up to and including 150 € GWG

The above values. up special treatment to 1,000 € and written off in the pool method at a flat rate 5 years

All other values above 1000 € are, as usual, treated

There is no right to vote anymore if you GWG depreciates normally or in the year of acquisition fully depreciates (not see it often) . GWG (and up to 150 €) must always be fully written off.

The obligation for the separate collection of GWGs falls away

The change relates only to the depreciation in the

three separate types of income of the Income Tax Act
1. , that income from agriculture and forestry, from business or from self-employment. Whether accounting is mandatory and you are charged by surplus account, no matter
   
2. The amendment does not refer to
3. depreciation in the other four types of income.
are meant above all the advertising costs for employees ("income from employment") and for income from rental income. It remains here at the 410-euro scheme (GWG in cost to 410 €). The camera equipment of the newspaper editor is distributed so employed under the old rules to the years of useful life, unless they cost only € to 410, then it may be the year of acquisition of acquisition. It remains at the old CCA-border and in the choice between full normal depreciation or amortization.

Past legal Until now

Movable depreciable fixed assets worth up to 410 € described it as a CCA. They had a special tax.

They could be written off in the year of acquisition. This has always been an option, the taxpayer could also choose the normal depreciation and distribute the costs according to the depreciation tables for year Eder life.

It had a separate recording pass on these subjects. Therefore, keeping a separate account within the "CCA" has been performed, since it also equal to the record keeping was done with. On this account all the CCA were recorded, rather than to book into the appropriate accounts as fixed assets (machinery, vehicles, BGA).

For purchases up to 60 euros was too much of the management effort. The income tax regulations (not the law!) Saw, therefore, that the record is no longer an obligation, which in turn caused that in the context of accounting these goods again treated separately. Instead they should be recorded on CCA, which of course was also possible they could also write directly or recorded on an expense account. Legally, it represented nothing more than ordinary GWG like all other goods up to 410 euros. The law itself does not know this limit.

It was therefore:

in the law:

0-410 €: CCA; abschgeschrieben was full.

from 410.01 €: normal Depreciation


in accounting or in practice:



00-60 €: Buy depreciable GWG, you did not have to book to the account "GWG"

60.01 € to 410 €: GWG, the one on the account "CCA" or booked by several GWGs.

from 410.01 €: normal depreciation, no CCA

This rule still applies for the non-independent sources of income

• Tips for teachers and authors
• Do not make the mistake I see in many publications. There are often given the limits, without clarifying where the next field begins. Get used to formulate the boundaries clearer.
• example

goods whose acquisition value 410 € "
not exceed

"

Thus, the usual laws formulations, confusing and difficult memorable. better formulation would be:

goods worth "to

including

" 410 €

or, if you want to call the area above: goods worth

from 410.01 €
.


not correct, as illogical:

to
410 Euro: treating such and such

• from 410 Euro: next level

details of the new rules

It relates to the write-back of "depreciable movable assets as fixed assets".
first Limits

A value up to and including 150 € to be the goods "GWG" as fully depreciated.

At a value of € 150.01 up to 1,000 euros, the goods through a "pool operating procedures" for 5 years amortized

A value from € 1000.01 to be written off completely normal.

already here the problems begin for readers, authors and lecturers. Because whether goods worth € 150.01 to 1000 CCA can still be called, or intended to be unclear and not set by law. Accordingly, it is confused when it says

"The CCA threshold has been lowered from 410 € to 150 €" and in the course of the text it says "GWG in the value of 410 to 1,000 euros ..."

The confusion of tongues can also be found in numerous Chamber of Commerce publications and even in Wikipedia. There is clearly defined at the outset that GWGs are goods in the net purchase price to 150 € (as of mid-January 2008). In a later section states: "Low-value goods that are purchased after December 31, 2007, or produced, the amount of their purchase or production cost 150 €, but not 1,000 € are ..."

One can not speak of a lowering of the threshold to 150 euros, while CCA from 150-1000 €, as this confuses the reader or learner. . This is not a problem, if one is about to become clear. The practice will have to remember, however, that the term newly defined or more clearly expressed in other ways.

The law requires nothing here. So you could in the future of two species of CCA or CCA-stage . Speak

• second Record keeping
  
deleted the record keeping requirement for GWGs (repeal of § 6 paragraph 2, sentence 4 and 5 of the Income Tax Act). The annoying 60.00 € limit lapses, as does the corresponding portion of the income tax regulations. All GWG up to 150 Euro can be charged uniformly, whether on an interim account GWG, or through direct write-off.
• Because of the lowering of the threshold to € 150 will completely eliminate these special record keeping requirements. This applies both to balancing the end and for taxpayers to determine the taxable profit in accordance with § 4 para 3 ITA. In the complex EÜR so that such expenses should no longer be in the assets to be listed.

third The right to vote

GWGs must be fully written off in the future. There is no more right to vote (§ 6 paragraph 2 ITA revised)

The previous option no longer exists. For the CCA to 150 EUR is the immediate depreciation will now be mandatory ("shall" instead of "may" in § 6 paragraph 2 sentence 1 ITA).


Whether they are still on between books a special CCA account would be technically possible, most plans provide accounts but one account anyway "depreciation on GWG", which you will use immediately.


4th Collectible items for CCA of more than 150 € to 1000 € (§ 2a Income Tax Act as amended)

The new pool procedure: Movable depreciable assets, fixed assets with a cost of 150.01 € and up to 1000 have called into an economic year-related collection items (the practice " Pool ") can be set. This collectible item is over 5 years to write.

Ew matters little above the article has a shorter or longer useful life. A device that is worthless after 3 years, but in this pool is so effectively written off over 5 years.

As for shorter service life, it expresses the law this way: "If an asset within the meaning of sentence 1 of the operating assets of, the compound item is not diminished..

The pool depreciation

GWGs the second stage (from 150.01 to 1000) as said in a Pool summarized. In the release, one reads of the "Pool Solution" or the "group assessment".

Each pool is treated as a single asset is treated and ready to write about a period of 5 years straight, regardless of sales, withdrawals or early impairment.


depreciation rate

One can also speak of a depreciation rate of 20%.

No vote

The pool depreciation is mandatory. This expresses the legislature, according to the usual legal language, the words "is to ..." from. There is thus a "mandatory group assessment"

time Proportionate depreciation is eliminated


The single item has the advantage that even in their first year must be no pro rata calculation of depreciation. Regardless of the acquisition date is given for the items contained in the collective assets thus also the first year is always a depreciation of one fifth of the cost or production cost.
Statutory acceptance:


Some time was questionable whether the pool of depreciation from the statutory requirements, assets shown in full (§ 246 para 1 HGB), corresponds.
The Institute of Certified Public Accountants (IDW) has now given the green light commercial approach: The tax pool value is also recognized under commercial law, if it is of minor importance.





computer and depreciation

a very unpopular issue bim purchase of computer equipment was that practice and case law expecting that no peripheral devices such as a printer, scanner, keyboard or use his own, can thus be a priori no CCA (Exceptions: All-in-one or fax machine). The printer had to be written off Ormal, even if it cost only 200 €. This law is now more of an advantage ("blessing in disguise"), because most purchases are in the range of the aggregate assessment. For classification as a CCA they are written off in future mandatory for 5 years. Since it is not there supposed to belong, they can be in accordance with the depreciation tables will continue to write off over three years.
Addendum:
source of information for new business tax 2008:
Business Tax Reform 2008: new rules on depreciation
f r 􀀃 Economic 􀀃 low-ter - a simple introduction to

depreciation accounting?

Dr. Oliver Voss, MBA, Frankfurt aM

http://www.unternehmensteuerreform.de/media/Oliver_Voss_Afa_fuer_geringwertige_WG_FR_2007_1149.pdf