Is Your PV System IAB-Eligible? The Checklist

In practice, the Investitionsabzugsbetrag (IAB, investment deduction under § 7g EStG) rarely fails on principle: it fails on one of seven checkpoints. Work through the list before you build the tax saving into your numbers; the figure itself comes from the IAB calculator.

The Checklist

1. Is your profit in the deduction year no more than €200,000? The profit threshold (Gewinngrenze) applies uniformly to sole proprietorships, partnerships and corporations, regardless of how profit is determined. What counts is the profit before deducting the IAB. If it is above the threshold: no IAB in that year, possibly in the next.

2. Is the system large enough to be taxable? Systems covered by the tax exemption in § 3 no. 72 EStG (up to 30 kWp on certain buildings) generate no taxable income, and therefore no IAB. Commercial rooftop projects from around 50 kWp are generally not affected by this.

3. Will the system be used at least 90% for business purposes? On-site consumption in the business plus grid feed-in regularly meets the quota. It gets critical with substantial private electricity use, for instance the owner's residence on the same meter.

4. Will you invest within three fiscal years? The deadline runs from the end of the deduction year. Realistic project lead time for commercial systems including grid connection: 6 to 18 months. The deadline is comfortable, but no reason to leave feasibility unexamined.

5. Will the system remain in the business until the end of the following year? Retention and use requirement: year of acquisition plus the following year in the same business. A planned sale of the system or the business within this period collides with the IAB.

6. Can the investment intention be documented? Formally, § 7g does not require a purchase order in the deduction year. In practice, a quote, a roof assessment and a profitability calculation support your position with the tax office (Finanzamt). A roof assessment based on official data is the cheapest evidence of serious planning.

7. Does the operator structure fit? The IAB belongs to the business that acquires and uses the system. With rental structures, holding setups or a planned contracting solution (there the operator invests, not you), the allocation should be clarified with your tax advisor in advance.

The Three Most Common Grounds for Exclusion

1. Profit above €200,000 in the intended deduction year. Manageable through timing, not through wishful thinking.
2. Small system under § 3 no. 72 EStG: tax-exempt means IAB-exempt.
3. Contracting instead of purchase: if you lease out your roof (NEXA Zero), you do not invest yourself and consequently have no IAB, but also no capital at risk. The IAB is an argument for the ownership model (NEXA Own), not an automatic feature.

Next Step

If all seven points check out: quantify the tax saving in the IAB calculator, start your project page with the initial analysis, set the deduction year with your tax advisor. The IAB rewards those who plan, and charges interest on everyone else's negligence.