The 200,000 euro profit ceiling for the Investitionsabzugsbetrag (IAB)
Bundesfinanzhof is tested against the tax profit (steuerlicher Gewinn) under § 2 Abs. 2 Satz 1 Nr. 1 EStGBundesfinanzhof — after off-balance-sheet corrections, with only the IAB deductions and add-backs of § 7g itself excludedBundesfinanzhof. The III. Senat so decided on 18 June 2026 (III R 38/23)Bundesfinanzhof, joining the X. Senat's lead judgment of 1 October 2025 (X R 16, 17/23)Bundesfinanzhof. The practical sting: non-deductible trade tax added back under § 4 Abs. 5b EStG counts toward the ceilingBundesfinanzhof and can push a business over it even where the Steuerbilanzgewinn sits just belowBundesfinanzhof.
The conditions of § 7g Abs. 1 Satz 2 EStG require profit determined under § 4 or § 5 EStGBundesfinanzhof, a profit in the deduction year — disregarding only IAB deductions under § 7g Abs. 1 Satz 1 and add-backs under § 7g Abs. 2 — not exceeding 200,000 eurosBundesfinanzhof, and electronic transmission of the deduction totals. Because § 7g defines Gewinn nowhere itselfBundesfinanzhof, the court reads it as the statutory profit concept of § 2 Abs. 2 Satz 1 Nr. 1 EStG, whose parenthetical concretises profit through §§ 4 to 7k EStGBundesfinanzhof — that is, the profit after off-balance-sheet corrections, not the balance-sheet figure alone. The reading follows wording and system (with discussion of purpose, history and constitutionality adopted from the X. Senat), and matches the BMF letter of 15 June 2022 (BStBl I 2022, 945, Rz 13) and the majority commentary. The same applies to the trade-tax Gewerbeertrag determined under income-tax rules (§ 7 Satz 1 GewStG)Bundesfinanzhof.
The dispute shows how narrow the margin is. A food retailer reported a Steuerbilanzgewinn of 199,309.90 euros for 2020Bundesfinanzhof and claimed a 120,000 euro IABBundesfinanzhof, treating corrections as irrelevant. The Finanzamt added back non-deductible business expenses (1,457 euros) and trade tax (10,199 euros), subtracted tax-free income under the Teileinkünfteverfahren (1,170 euros), and arrived at a tax profit of 209,795.90 eurosBundesfinanzhof — over the ceilingBundesfinanzhof. The Finanzgericht Baden-Württemberg had sided with the retailer and allowed the IABBundesfinanzhof; the Bundesfinanzhof reversed and dismissed the claimBundesfinanzhof. Trade tax, which is no business expense under § 4 Abs. 5b EStG and hence does not reduce tax profitBundesfinanzhof, was the decisive item pushing the profit over 200,000 eurosBundesfinanzhof; the nearly offsetting tax-free income and non-deductible expenses did not matter beside it.
Businesses whose Steuerbilanzgewinn sits just under 200,000 euros must therefore compute the ceiling on the corrected tax profit — adding back trade tax under § 4 Abs. 5b EStG and other non-deductible expenses — before claiming an IABBundesfinanzhof of up to 50 percent of expected acquisition or production cost for future depreciable movable fixed assets used almost exclusively in a domestic Betriebsstätte. A balance-sheet figure below the line is not enoughBundesfinanzhof.
Legal basis: EStG § 7g Abs. 1 Satz 1 und Satz 2 Nr. 1, § 2 Abs. 2 Satz 1 Nr. 1, § 4 Abs. 5b; BFH judgment of 18 June 2026, III R 38/23, following X R 16, 17/23 of 1 October 2025.
Compute the EUR 200,000 ceiling on the corrected tax profit — adding back trade tax under section 4(5b) EStG and other non-deductible expenses — before claiming an Investitionsabzugsbetrag.
