The investment deduction, applied to battery storage
Under Section 7g of the German Income Tax Act (EStG), part of a planned investment can be brought forward for tax purposes. Bright & Green combines that instrument with a real asset developed, built and operated in-house: a battery storage system.
Non-binding information, not tax advice.
What Section 7g EStG allows
Three figures are set out in the statute. Their application to your business depends on the individual case and rests with your tax adviser.
- 50%
- Investment deduction
- €200,000
- Profit limit
- 40%
- Special depreciation
of the anticipated acquisition costs, deducted from profit in advance
of the business in the year of the deduction
in addition, in the year of acquisition
The investment deduction allows up to 50% of the anticipated acquisition costs of a planned investment to be deducted from profit before the acquisition takes place. One condition is that the business's profit does not exceed €200,000.
In the year of acquisition, a special depreciation of 40% can be claimed in addition. The tax effect is thereby brought forward in time; it constitutes a liquidity effect rather than a subsidy, as the deduction evens out again over the service life.
Battery storage suits this model because it constitutes movable business property and generates ongoing revenue. Whether the investment suits your business is for your tax adviser to assess.
Statutory figures under Section 7g EStG. Non-binding information, not tax advice – the individual assessment is made by your tax adviser.
Who an IAB investment is relevant for
The investment deduction presupposes a business and compliance with the profit limit. Three groups regularly meet those conditions.
Businesses below the profit limit
Commercial businesses, professionals and the self-employed whose profit in the year of the deduction does not exceed €200,000.
Businesses facing a tax charge
Businesses taxing profit in the current year and intending to invest in the following years can bring the tax effect forward.
Investors seeking a real asset
Behind the participation stands a battery storage system that earns revenue on the power market and is developed, built and operated by Bright & Green.
How an IAB investment proceeds
The process comprises five steps. At each of them, the tax assessment remains the responsibility of your tax adviser.
Initial conversation
Bright & Green clarifies your objectives and establishes whether an IAB approach is suitable for your business in principle.
Order of magnitude
The IAB calculator determines the tax effect using the Section 7g figures, without obligation.
Project and documents
You receive the documents for a storage project: site, grid connection, technology and operating concept.
Alignment with your tax adviser
Your tax adviser assesses the investment on the basis of the project documents. Bright & Green provides the evidence required for that.
Participation, construction and operation
The participation is closed, the storage system is built and operated by Bright & Green for the whole service life.
What stands behind the participation
The subject of the participation is neither a fund nor a security, but a battery storage system with its own grid connection that Bright & Green develops, builds and operates.
Development, construction and operation under one responsibility
Securing the land, the grid connection, permits, installation, dispatch and market access remain with Bright & Green for the whole service life.
Revenue on the power market
Grid services, arbitrage and peak-load capping: the storage system serves several revenue streams at once.
Technology partners and certifications
Components from Siemens, KACO new energy, Gotion High-tech, BYD, and Kenter. Bright & Green is certified to ISO 9001, ISO 14001, VCA**, and SEI.
Solar origins
More than 10 years of experience and more than 1,500 solar plants built form the foundation on which Bright & Green develops storage and data centres today.
Starting with IAB Invest
View the offers, calculate the order of magnitude or enquire directly: the three routes can be taken in any order.
What investors ask us about the IAB
The answers describe the statute and the offering of Bright & Green. What applies to your business is for your tax adviser to assess.
Not tax advice. The information describes Section 7g EStG in general terms; the assessment of your case is made by your tax adviser.
Enquire about an IAB investment
Send us the key figures of your business. You receive project documents with which your tax adviser can make the assessment.