Truck depreciation and book value: five years, or a million kilometres

The list price of a tractor unit is paid once. The number that appears in the accounts every year afterwards is the write-down, and unlike fuel or tolls it is not set by the market: it is set by a table, a formula in a tax act, and a fifty-year-old decree a leasing company reads before it quotes a residual value.

The write-down is a rule, not an estimate

Article 12(5) of Directive 2013/34/EU — in force, consolidated text of 18 March 2026 — requires the purchase price or production cost of fixed assets with limited useful economic lives to be reduced by value adjustments calculated to write off their value systematically over those lives. That requirement is addressed to Member States and, by Article 1(1), it reaches only the company forms listed in Annexes I and II, so it does not itself bind a haulier trading as a sole trader. German commercial law goes wider: § 253(3) sentence 1 HGB imposes the same planned write-down on limited-life fixed assets, in a book that begins at § 238(1) by obliging every Kaufmann to keep accounts, and that is what catches an operator who keeps commercial books. It does not catch all of them. § 241a HGB releases an Einzelkaufmann who shows no more than €800,000 of turnover and no more than €80,000 of annual surplus at each of two consecutive balance sheet dates from §§ 238 to 241 altogether, and § 242(4) sentence 1 then puts that same trader outside the duty to draw up a balance sheet and a profit and loss account at all, which leaves § 253(3) nothing to attach to. A one-truck business sits under both thresholds without trying, and a trade whose nature or size does not require a commercially organised operation is not a Handelsgewerbe under § 1(2) HGB, so its owner is not a Kaufmann by that route at all. For that operator the write-down arrives by the tax route alone: § 4(3) sentence 1 EStG lets a taxpayer who is not obliged to keep books compute profit as the excess of receipts over expenses, and sentence 3 requires the depreciation rules to be followed inside it all the same. Tax law then supplies the method: § 7(1) sentence 1 EStG sets out depreciation in equal annual amounts, sentence 2 measures it by the betriebsgewöhnliche Nutzungsdauer — the ordinary operating useful life — and sentence 4 prorates the first year by one twelfth for each full month before the month of acquisition, which is why a five-year write-down runs into a sixth calendar year. None of that says what the useful life of a truck is. That comes from a separate document.

Table 90: five years from 7.5 tonnes

The Bundesministerium der Finanzen publishes depreciation tables by sector, and the one governing road haulage is table number 90, the AfA-Tabelle für den Wirtschaftszweig “Personen- und Güterbeförderung (im Straßen- und Schienenverkehr)”, issued 26 January 1998 under file reference IV A 8-S 1551-9/98 and published at BStBl I 1998, 123. It applies to all fixed assets acquired or produced after 30 June 1997, and the sectors it names include goods transport by road, forwarding, warehousing, scheduled and interurban bus services, taxis and hire cars with driver, and courier services.

Two things there run against intuition. The break is at 7.5 tonnes permissible gross weight, and the heavier vehicle gets the shorter life. And tractor and trailer are separate assets on separate clocks, five years against six, so a combination bought together does not come off the books together — a split with the same roots as the operational one in trailer types explained.

Why other people quote nine years

The contradiction has a documented resolution. The BMF publishes a second table for assets not specific to any sector, the AfA-Tabelle für die allgemein verwendbaren Anlagegüter or “AV”, dated 15 December 2000 and published at BStBl I 2000, 1532. Its position 4.2.3, “Lastkraftwagen, Sattelschlepper, Kipper”, gives nine years; position 4.2.6, trailers, semi-trailers and swap bodies, gives eleven; position 4.2.7, buses, gives nine.

The general preliminary remarks printed with that table settle which one applies. The useful lives are sector-bound, they say, with the exception of the figures in the general table; where an asset appears in both, the sector table’s value applies to taxpayers belonging to that sector. A haulier, forwarder or bus operator therefore reads five, six or seven years; a business outside those sectors that happens to run a lorry of its own reads nine. The nine-year figure in circulation is not invented, it is from the other table.

Those remarks are also candid about what the numbers are: the useful lives rest on the experience of tax audit, and the figure is a reference point for judging whether the depreciation claimed is appropriate, already allowing for shift working customary in the sector. Table 90 closes that last door for position 16.2.2.2, where shift premiums are no longer possible.

A million kilometres, if you meter it

§ 7(1) sentence 6 EStG offers an alternative where it is economically justified: depreciation measured by the asset’s output rather than in equal annual amounts, provided the taxpayer proves the output attributable to each year. The special remarks to table 90 apply that to trucks in as many words. Departing from the rates under position 16.2.2, shorter periods may be used for lorries by way of output-based depreciation, and where the annual figure is calculated by kilometres run, a total mileage of 1 million km is taken as the basis.

That is a basis for calculating a write-down, not a measurement of how long a truck lasts: a figure the German tax administration takes as given when the annual amount is metered by kilometres run, attached to position 16.2.2 as a whole rather than to heavy lorries alone, and written into a tax document rather than a brochure. Set against the five years of position 16.2.2.2 it implies 200,000 km a year — our arithmetic, printed in neither the table nor the Act. Below that the odometer writes down more slowly than the calendar; above it, faster, which is the point of the concession. The catch is proof, and the records that satisfy sentence 6 are the ones a purchaser already asks for: the mileage on each roadworthiness certificate and the distance data held by the tachograph, both covered in buying a used truck.

Declining balance, and a separate rule for battery trucks

Straight-line is not the only method open. Under § 7(2) EStG, movable fixed assets acquired or produced after 30 June 2025 and before 1 January 2028 may be depreciated on a declining balance at a constant percentage of the remaining book value, which may not exceed three times the straight-line rate and may not exceed 30 per cent. On the sectoral table’s 20 per cent, three times the straight-line rate would be 60, so the 30 per cent cap binds first — our arithmetic on the two published figures. § 7(3) allows a switch from declining balance to straight-line but not the reverse.

§ 7(2a) EStG then carves out electric vehicles. For vehicles as defined in § 9(2) of the Kraftfahrzeugsteuergesetz that belong to fixed assets and were acquired in the same window, the deductible percentages of the acquisition cost are 75 in the year of acquisition, 10 in the first following year, 5 in the second and third, 3 in the fourth and 2 in the fifth, with no monthly proration. Sentence 2 makes that a conditional entitlement rather than an automatic one: the schedule may be applied only by a taxpayer who has claimed no Sonderabschreibung on the same asset. The definition it borrows is written by drive type rather than by weight: § 9(2) KraftStG covers vehicles driven exclusively by electric motors fed wholly or predominantly from mechanical or electrochemical energy stores or from emission-free energy converters, and sets no weight limit in the definition itself. The 50 per cent reduction that paragraph grants attaches to the amount arising under § 9(1) No. 3 or No. 4(a) — No. 3 for other vehicles up to 3,500 kg permissible gross weight, No. 4 for all remaining vehicles above it — but § 7(2a) EStG borrows only the definition in the brackets, not the rate, and it is that definition a 40-tonne battery tractor answers to. A battery tractor such as the eActros 600 is on a different first-year curve from a diesel bought the same week.

Where the lease residual comes from

Ask a leasing company how it arrived at the residual value in a truck contract and the answer starts with the same tables. The BMF letter of 19 April 1971 on the income-tax treatment of leasing contracts for movable assets — BStBl I 1971, 264, file reference IV B/2 – S 2170 – 31/71, still reproduced in the official Einkommensteuer-Handbuch — says so in its opening section: the ordinary operating useful life to be applied is the period stated in the official AfA tables.

Finance leasing is defined there by two conditions: the contract runs for a fixed period neither party may terminate if it is performed as agreed — the Grundmietzeit — and the instalments over that period cover at least the lessor’s acquisition or production cost plus all ancillary costs including financing costs. That second condition makes the 1971 letter a full-payout decree, and it is the test of cost coverage — not the presence of a residual figure in the quote — that decides whether a contract is inside it. Inside its own class, attribution follows the period, though the decree is careful about how firmly it says so. Section III opens by making attribution depend on the contract the parties chose and on how it is actually performed, to be decided in the individual case on an appraisal of all the circumstances, and every rule beneath that opening reads regelmäßig: this is what the answer is as a rule. As a rule, then, with no purchase or extension option, the asset belongs to the lessor where the fixed term is at least 40 and at most 90 per cent of the ordinary operating useful life, and to the lessee below 40 or above 90. With a purchase option it stays with the lessor only if the term is inside that band and the option price is not lower than the book value obtained by applying straight-line depreciation from the official AfA table, or the lower common value at the time of sale. With an option to extend, the same band applies and the test on the price becomes a test on the follow-on rent, which must cover the loss in value computed from that table book value, or the lower common value, and the remaining life the table gives. A fourth type never reaches the arithmetic: a Spezial-Leasing contract, over an asset cut to the lessee’s own circumstances and as a rule only sensibly usable by the lessee after the fixed term, is attributed to the lessee without regard to the ratio of term to useful life and without regard to any option clause.

Put the sectoral table into those percentages and the shape of the full-payout market falls out. Five years is 60 months, so the band for a heavy truck runs from 24 to 54 months, and the six-year life of a trailer or coach gives 28.8 to 64.8 months; both bands are our arithmetic on the 1971 letter’s percentages, printed in neither the letter nor the table, and both ends are inclusive because that letter says at least 40 and at most 90. After three years of a five-year life the table book value is 40 per cent of cost — the same arithmetic again, run on the table’s 20 per cent rate and printed in neither the decree nor the table — and an option priced below that, or below the lower common value at the time of sale, is what moves the truck onto the lessee’s balance sheet.

The other side of the line is drawn by the same test read the other way, and it is worth stating what the test is not. A residual figure in a quote does not by itself put a contract outside the 1971 letter: that letter’s own option model contemplates a full-payout lease ending in a price measured against the table book value. What puts a contract outside is that the instalments over the fixed term cover the lessor’s acquisition or production cost and its ancillary and financing costs only in part. Reading a truck quoted with a residual as a contract of that second kind is our inference from how such quotes are built, not a rule either decree states. Where the cover is partial, the BMF letter of 22 December 1975 — file reference IV B 2 – S 2170 – 161/75, printed as section III of the same Anhang — records that finance leasing within the meaning of the 1971 letter is not present and the question of attribution falls to be decided on general principles. It then works through the partial-payout models one at a time. Where the lessor holds an Andienungsrecht, the right to require the lessee to buy at a price fixed when the contract is signed, with no option running the other way, the lessee carries the risk of a fall in value but the lessor keeps the chance of a rise, and the truck stays with the lessor. Where any excess over the unamortised balance is split, the lessor must keep 25 per cent of it, because below that its share in a rise in value no longer weighs enough and the truck is attributed to the lessee. And where the contract may be terminated, at the earliest after a Grundmietzeit of 40 per cent of the ordinary operating useful life, with 90 per cent of the sale proceeds credited against the closing payment, the lessor is economic owner. The band those models are described within is more than 40 and not more than 90 per cent — the lower end exclusive, where the 1971 letter’s is inclusive. And it closes with the caution the 1971 letter opens with: what it sets out holds in principle only, so far as particular terms in an individual contract do not compel a different judgment.

What both decrees anchor to the table is the term rather than the price: the 40 and 90 per cent are read against a useful life the AfA table prints, which is why a lease is quoted in months that look arbitrary until the table is beside it. The residual is measured against the table book value only in the 1971 letter’s purchase-option test, on a full-payout contract. In the partial-payout models it is the used market that settles the account, through the closing payment or the split of the excess, and that is where the lessor learns whether its own forecast held.

Book value is not market value

The two diverge constantly, and the routes for closing the gap are narrow. § 7(1) sentence 7 EStG allows a deduction for exceptional technical or economic wear, though § 7(2) sentence 4 shuts that door on an asset being written down on a declining balance; § 253(3) HGB requires an unplanned write-down to the lower attributable value where the impairment is expected to be permanent. But the general preliminary remarks set a high bar for the economic argument: a shorter useful life on those grounds may be used only where the asset is objectively economically consumed before the end of its technical usability, and that is assumed only where the possibility of any economically sensible alternative use or realisation has definitively ceased. A tractor in the wrong toll class or emission step, as set out in what it costs to run a tractor unit, is not thereby economically consumed. Somebody else will still buy it.

The United Kingdom writes it off differently

There is no useful-life table in the British system at all. Capital allowances pool assets and write the pool down: the main pool at 14 per cent from April 2026 and 18 per cent before, the special rate pool at 6 per cent, the change taking effect on 1 April 2026 for corporation tax and 6 April 2026 for income tax. A pool written down by a percentage of its balance does not empty itself by arithmetic alone, and there is one door out at the bottom: where the balance in a main or special rate pool is £1,000 or less before the allowance is worked out, the whole balance may be claimed as a small pools allowance, prorated where the accounting period is longer or shorter than twelve months. Disposals do not create that door — proceeds are deducted from the pool before the rate is applied.

For trucks that reducing balance is often beside the point, because HMRC is explicit that lorries, vans and trucks do not count as cars. They are therefore eligible for the annual investment allowance of £1 million deducted in full, and for full expensing, under which a company deducts 100 per cent of the cost of new and unused plant and machinery bought from 1 April 2023 in the year of purchase. Full expensing is narrower than that description alone suggests. HMRC’s policy paper for the November 2025 measure describes the leasing sector as currently excluded from the existing first-year allowances, and says in terms that unlike full expensing the new allowance will be available for unincorporated businesses and for assets used for leasing — so a lessor buying tractor units to put out on contract is precisely the operator full expensing does not serve. That is why the third route was opened: a 40 per cent first-year allowance for plant or machinery bought on or after 1 January 2026 that is new and unused, qualifies for the main rate of writing down allowance and is not a car — a new tractor unit on every count — with writing down allowances claimed on the remaining 60 per cent in the next accounting period. Only companies may claim full expensing and the 50 per cent first-year allowance; the same policy paper states that the new relief will be available to all businesses, not just incorporated ones, with a specific exclusion for overseas leasing, so an unincorporated haulier and a domestic lessor both have a first-year route. A British company buying a new tractor for its own fleet can take the whole cost against profit in year one, where a German haulier writes the same truck down at 20 per cent a year, or 30 per cent of a falling balance, or by the kilometre against a million-kilometre life.

Reading a contract against the table

Establish which table the business is in, because the difference between five years and nine is not a matter of opinion. Read a lease term as a percentage of the useful life in that table rather than as a number of months, since the 40 and 90 per cent thresholds are what the treatment turns on. And read a quoted residual against the table book value the decrees use as their yardstick rather than taking it for a valuation in its own right — the discipline that applies when a used coach is checked against its papers instead of the seller’s description.