Business assets or private assets?
If business use exceeds 50 percent, the device is necessary business assets. Between 10 and 50 percent, there is a right to choose (elective business assets, gewillkürtes Betriebsvermögen). Below 10 percent, the phone remains private property; only the business share of costs is then deductible.
Acquisition costs
| Net price | Treatment |
|---|---|
| up to €800 | Low-value asset: immediate deduction in the year of purchase |
| over €800 | Depreciation over the standard useful life |
For smartphones and tablets, the tax authorities recognise a useful life of five years; for computer hardware and software, a one-year useful life has also been permitted since 2021 — many tax offices classify smartphones under this rule. If in doubt, ask your tax adviser (Steuerberater).
Ongoing costs
The basic fee, call charges, data volume, repairs and accessories are business expenses to the extent of business use. Where usage is mixed and there is no itemised evidence, tax offices regularly accept a flat-rate apportionment of 50 percent; a higher share is possible if you can credibly demonstrate it.
Evidence of business use
- Keep an itemised call record over a representative three-month period.
- Mark business calls and data use, calculate the share, and document the result.
- The cleanest solution: a second contract or a second SIM used exclusively for the business.
Input tax deduction
Entrepreneurs liable for VAT deduct input tax in proportion to business use. This requires a proper invoice made out in the name of the business or the sole trader. Where business use is at least 10 percent, full allocation to the business is possible; in that case, private use must be taxed as a deemed supply for private consumption (unentgeltliche Wertabgabe).
Phones for employees
If you provide an employee with a company mobile phone, private use is entirely tax- and contribution-free under § 3 No. 45 EStG — with no value threshold. It is important that the device remains the property of the business and is only made available for use, not transferred in ownership.
Keep receipts and contracts
Purchase receipts, contract documents, invoices and your apportionment documentation must be kept in your accounts for ten years. Terminations and contract changes should be sent in writing and in a provable manner — many mobile network operators only recognise postal notice or their own customer portal.