Website costs: capitalize or write off immediately?

Capitalize a homepage or book it as an expense: the basic principle

For tax purposes in Germany, what matters is whether the website is a standalone asset that serves your business over several years. In that case it belongs to fixed assets and – put simply – is not booked in full as an expense in the year of payment but capitalized and depreciated, spread over the years of use. Like software, it counts as an intangible asset.

Expenses that do not create a new asset, by contrast, are immediately deductible as operating expenses: ongoing hosting and domain fees, maintenance, security updates, minor text changes or content upkeep. Costs for advertising on other platforms or for search engine ads generally belong here as well. What matters is that such costs are recorded cleanly and separately from the creation costs. Your tax advisor makes the distinction in the individual case.

Purchased or self-created: why the distinction matters

An important rule applies to intangible assets in the tax balance sheet: only assets acquired for consideration may be capitalized; for self-created intangible fixed assets there is a capitalization ban under Section 5(2) of the Income Tax Act (EStG). If your own employees program the website, the costs are therefore generally immediately deductible as operating expenses.

If you commission an agency that delivers the website as a finished work and bears the production risk, the website is in practice usually treated as acquired and must then be capitalized. If, on the other hand, you contribute significantly to production yourself and bear the risk, the classification may turn out differently. It helps if the quote and invoice describe the services clearly.

Depreciating a website: which useful life applies?

There is no official depreciation table (AfA-Tabelle) with a fixed value for websites. The useful life is estimated, and because technology and design evolve quickly, short periods of a few years are usually used in practice – three years is often cited. Depreciation is straight-line and, in the first year, pro rata from the month of acquisition, so generally from handover of the finished website.

Whether the one-year useful life that the Federal Ministry of Finance has provided for computer hardware and software can also be used for websites is not clearly regulated; websites are not expressly mentioned in that letter, and opinions differ. Be sure to clarify this question with your tax advisor before you claim the costs in full in the first year.

Domain, hosting and maintenance: what is an immediate expense

The ongoing costs of your website are generally immediately deductible operating expenses: hosting, annual domain fees, SSL certificates, maintenance contracts, security updates, backups and minor content changes. Subscriptions for legal texts or consent tools typically fall under this as well. These costs are not spread over several years but reduce profit in the year in which they arise.

A special rule applies to domains you buy from a third party: according to the case law of the Federal Fiscal Court (Bundesfinanzhof), such a domain name is generally a non-depreciable intangible asset and is therefore not depreciated on a scheduled basis. This does not affect the usual annual registration fees for your domain – they remain ongoing expenses and are immediately deductible.

Relaunch, extension or upkeep: how is it treated?

A complete relaunch generally creates a new website – that is, a new asset that is capitalized and depreciated. For the old website, the question then arises of any remaining book value, which your tax advisor will record appropriately upon disposal. If significant new features are added to an existing website, such as an online store or a customer portal, these may constitute subsequent acquisition costs.

Smaller adjustments, new texts, image swaps or bug fixes, by contrast, usually count as maintenance expense and are immediately deductible. The line between extension and upkeep is not always sharp. It therefore helps if new development, extension and maintenance are shown separately in the quote and invoice – on request, we structure our quotes in exactly this way.

Depreciating a website in SKR03 and SKR04: notes on bookkeeping

How the website is booked in the SKR03 or SKR04 (the German standard charts of accounts) is determined by your tax advisor. A capitalized website is typically recorded under intangible assets; the account for IT software is often used – 0027 in SKR03 and 0135 in SKR04. The annual depreciation runs through the depreciation accounts for intangible assets, ongoing costs through suitable expense accounts.

Businesses entitled to deduct input VAT can claim the VAT from the agency invoice as input tax regardless of depreciation. For anyone asking about depreciating a website in 2025 or later years: relief such as declining-balance depreciation or special depreciation under Section 7g EStG is aimed at movable assets and generally does not apply to a website. This overview does not replace tax advice.