Sonder-AfA §7g (5) vs. declining-balance AfA §7 (2): which combination, when?

With the 2025 steuerliches Investitionssofortprogramm, declining-balance AfA is back in its strongest form: up to three times the straight-line rate, capped at 30 % per year, for movable fixed assets acquired after 30 June 2025 and before 1 January 2028. German private investors therefore have a second strong lever alongside the Sonder-AfA under §7g (5) EStG — and both operate in the same window: the first years after acquisition. The answer to 'which method' is therefore clear in most cases: combine both, and pull the effect as far forward into year one as possible. The interesting question is less the 'whether' than how large the effect is — and what you do with the early liquidity.

This article puts the two instruments side by side, shows that — unlike most special depreciation allowances — they do not exclude each other but together produce the maximum early effect, and works it through for battery storage and solar PV. The basis is always an investment deduction (IAB) already claimed — the mechanics are explained in IAB under §7g EStG: example calculation for battery storage.

Two levers, same depreciation basis

Both instruments act on the same point — and on the same depreciation basis. If you use the IAB, you deduct up to 50 % of the planned acquisition cost from profit in advance; in the year of acquisition that amount is added back to profit, but at the same time deducted from the acquisition cost (reduction under §7g (2) EStG). A €300,000 investment thus becomes a €150,000 depreciation basis — and it is precisely these €150,000 that form the basis for both depreciation methods compared here.

The Sonder-AfA under §7g (5) EStG is an additional depreciation pot of 40 %, freely distributable over five years. The declining-balance AfA under §7 (2) EStG, by contrast, is the regular depreciation — just in falling amounts instead of constant ones. The key point: the Sonder-AfA runs on top of the regular AfA, it does not replace it.

Sonder-AfA §7g (5) EStG in detail

The Sonder-AfA lets you write off an additional up to 40 % of the depreciation basis in the first five years — freely distributable across that period. You can take the full 40 % in year one, spread it evenly over five years, or deliberately bundle it into a single year with a particularly high tax burden. That flexibility is the real planning lever.

The condition is the same profit ceiling as for the IAB: prior-year profit must not exceed €200,000. Eligible are movable fixed assets — new or used — that are used (almost) exclusively, i.e. at least 90 %, for business purposes in the year of acquisition and the following year. Both a battery storage system and a solar PV plant held in a suitably structured investment regularly meet this.

Declining-balance AfA §7 (2) EStG in detail

Declining-balance AfA was abolished for years, returned on a temporary basis with the Wachstumschancengesetz in 2024 (then twice the straight-line rate, capped at 20 %), and was significantly upgraded with the 2025 steuerliches Investitionssofortprogramm: for movable fixed assets acquired after 30 June 2025 and before 1 January 2028, it is up to three times the straight-line rate, but no more than 30 % per year (§7 (2) EStG).

Unlike the Sonder-AfA, declining-balance AfA is calculated not on the acquisition cost but each year on the residual book value — so the amounts fall from year to year. How high the declining-balance rate is depends on the asset class's official useful life, and this is exactly where battery storage and solar PV differ:

• Battery storage (BESS): ten-year useful life, straight-line AfA 10 %. Three times that would be 30 % — exactly the cap. So 30 % declining-balance instead of 10 % straight-line in year one.
• Solar PV plant: twenty-year useful life, straight-line AfA 5 %. Three times that is 15 %, the 30 % cap does not bite here. The declining-balance lever is therefore smaller for PV than for storage — but still three times the straight-line rate.

At some point the falling declining-balance amount drops below the straight-line residual depreciation; from this crossover year, you switch to straight-line. In the Helios standard the AfA schedule makes that call automatically — the investor does not have to.

Can both run in parallel? Yes.

Here a detail comes into play that many overlook — and that a good tax advisor immediately questions. As a rule, §7a (4) EStG stipulates that only straight-line AfA is permitted alongside a special depreciation allowance. The Sonder-AfA under §7g (5) EStG is, however, an explicit exception: because of the clear wording in §7g (5), it may also be claimed alongside the declining-balance AfA under §7 (2) EStG.

In practice this means: Sonder-AfA (40 %) and declining-balance AfA can be combined — both at once, on the same depreciation basis. This combination produces the maximum depreciation effect in the first years. Just how large it is for battery storage and PV respectively, the worked example below shows.

The standard choice — and the two exceptions

For the vast majority of investors the answer is clear: take the Sonder-AfA in full in the acquisition year, combined with declining-balance AfA. This variant produces the largest tax effect in year one, the highest present value over the term, and the maximum early liquidity. There are only two constellations in which deviating makes sense.

Exception 1: Year-1 income can't absorb the full deduction

Depreciation only works as strongly as the marginal rate it runs against. Anyone who writes off so much in the acquisition year that taxable income slips below the top-rate threshold gives away deduction volume at a lower rate. In that case it pays not to take the Sonder-AfA in full in year one, but to spread it over up to five years so that the full top rate is hit each year. The declining-balance AfA runs on unchanged.

Exception 2: The acquisition falls outside the declining-balance window

Declining-balance AfA only applies to acquisitions after 30 June 2025 and before 1 January 2028. Anyone acquiring later — unless the legislator extends the window — can only use straight-line AfA; then the combination of Sonder-AfA plus straight-line AfA is the best available choice. The Sonder-AfA itself is unaffected by this; it is not time-limited.

The year-1 effect: battery storage and solar PV

The calculation below shows the maximum year-1 effect — Sonder-AfA in full in the acquisition year plus declining-balance AfA — for both asset classes, each at a €300,000 investment volume and a €150,000 depreciation basis after an IAB already used. The difference between battery storage and PV comes solely from the declining-balance AfA: 30 % for BESS (ten-year useful life), 15 % for the PV plant (twenty years).

What the early liquidity is worth

The real lever is not the size of the depreciation, but its timing. The tax effect does not flow back spread over ten or twenty years, but overwhelmingly at once — and is therefore available again the following year. This early liquidity is free capital: for the equity tranche of the next investment, for extra debt repayment, or for building a diversified portfolio over several years.

This is exactly where the combination develops its compounding character: anyone who forms the IAB anew year after year and channels the year-1 effect into the next investment builds substance faster than the pure equity outlay would suggest. How a portfolio develops from this over several years is shown in Using the investment deduction every year: building a portfolio over multiple years; how little equity really remains tied up after these effects is set out in How much equity is actually required?.

Elections, switching rules, documentation

Three points decide clean execution in practice. First: the choice of method is exercised with the tax return — so it is not a decision of the acquisition day, but one that can be optimised with the tax advisor after the fact. Second: switching between methods is allowed in one direction only — from declining-balance to straight-line AfA, never back; the AfA schedule sets the switching point. Third: the Sonder-AfA claimed must be documented each year in the AfA register; without that documentation, the election can be lost in a dispute.