Deduct Software & SaaS in Germany 2026: The Full Guide

Almost no business runs without software subscriptions in 2026: Microsoft 365, Adobe Creative Cloud, Notion, Figma, ChatGPT Plus, a CRM, plus your accounting tool. Monthly licences quickly add up to several hundred euros. The good news: practically every tool you use for business is fully deductible: the only questions are how to book it and whether you reclaim the input VAT.

Software follows simpler rules than most purchases: SaaS subscriptions are operating expenses, fully deductible in the year you pay them, and purchased licences also have a useful life of just one year thanks to a Federal Ministry of Finance ruling. The one real trap is subscriptions from foreign providers: there, the reverse-charge procedure applies.

Here are the rules for booking SaaS subscriptions, licences and software purchases cleanly in your EÜR or annual accounts in 2026, including input VAT, foreign subscriptions and private use.

Key facts at a glance

• SaaS subscriptions (monthly/annual) are running operating expenses, deductible 100 % in the year you pay, no fixed-asset register.
• Purchased perpetual licences have a one-year useful life under the ministry ruling: you deduct them in full in the year of purchase, whatever the price.
• Under standard taxation you reclaim the stated input VAT via your preliminary return; small-business owners deduct the gross amount but reclaim no input VAT.
• Foreign subscriptions (Adobe/Microsoft from Ireland, AI tools from the US) run via reverse charge: you only pay net with a stored VAT ID.
• With private use, only the business share counts; purely business tools are 100 % deductible.

Software subscriptions: operating expenses, deducted immediately

A monthly or annual SaaS subscription is not a capital purchase; it is a running operating expense. You pay for a temporary right of use, not a lasting asset. So the amount does not go into your fixed-asset register; it goes straight into your costs and is 100 % deductible in the year you pay it.

Typical examples every freelancer and every GmbH can claim without argument:

• Productivity & office: Microsoft 365, Google Workspace, Notion, Slack
• Creative & design: Adobe Creative Cloud, Figma, Canva Pro
• Sales & marketing: CRM, email tools, SEO software
• AI & development: ChatGPT Plus, GitHub, hosting, domains
• Accounting & taxes: your invoicing and bookkeeping tool

The only condition is business purpose: the tool must serve your business. An invoice in your name or your company's name is proof enough; for subscriptions that is almost always a downloadable PDF in your account.

Subscription, licence or low-value asset? How to book it

Whether a tool goes straight into your costs or is first recorded as an asset comes down to one question: a time-limited right of use, or a lasting purchase. The decision tree shows the path; in 2026 both branches end in a full deduction in the current year anyway.

Purchased software & licences: one-year useful life

If you buy software once as a perpetual licence (e.g. a full Office version or an industry program), it is an intangible asset. Expensive software used to be depreciated over several years. But under the Federal Ministry of Finance ruling of 22 February 2022, operating and application software now has a customary useful life of one year, so you deduct the full cost in the year of purchase, regardless of price.

This mirrors the rule for computer hardware such as laptops: since 2022, hardware and software are treated the same. If the licence costs no more than €800 net, the immediate write-off for low-value assets (GWG) applies anyway. The upshot: almost all software, subscription or purchase, lands fully in the current year of your profit calculation, whether you file an EÜR or keep double-entry books.

Reclaiming input VAT from software invoices

If you are entitled to deduct input VAT (standard taxation, not the small-business scheme), you reclaim the VAT shown on the invoice via your preliminary VAT return. With a German provider charging 19 % VAT, an Adobe subscription of €71.39 gross carries about €11.40 input VAT per month, a noticeable sum over a year.

Here is how that adds up over a year of typical tools (example figures, gross):

What matters is a correct invoice with all the mandatory details under §14 UStG. A bare payment confirmation or bank statement is not enough; download the proper invoice from the provider's portal. More in our guide to input VAT deduction. Small-business owners deduct the gross amount as an expense but reclaim no input VAT.

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Foreign subscriptions: the reverse-charge trap

This is where it gets tricky. Many tools come from foreign providers: Adobe and Microsoft bill from Ireland, for example, and many AI and SaaS services from the US. For electronic services to businesses, the place of supply is Germany (§3a(2) UStG), and the reverse-charge procedure applies (§13b UStG):

• The provider invoices net, without VAT, provided you have stored your VAT ID (USt-IdNr) in your account.
• You owe the German VAT and report it in your preliminary return, but deduct it as input VAT in the same step. For standard-taxed businesses it is a zero-sum game, but still reportable.

Whether or not your VAT ID is stored decides if the subscription costs you real money:

Without a stored VAT ID, many providers charge you foreign VAT, which you cannot reclaim as input VAT in Germany, money thrown away. Apply for a VAT ID and enter it everywhere. Note for small-business owners: you must still pay the reverse-charge VAT but cannot deduct it; details in the reverse-charge guide.

Private use & mixed subscriptions

If you also use software privately, only the business share counts. With a Microsoft 365 Family subscription the whole household uses, or a streaming service "for the office", the tax office looks closely.

• Purely business tools (CRM, accounting, industry software): 100 % deductible.
• Mixed-use subscriptions: only the estimated business share, plausibly justified.
• Clearly private services (personal streaming account, gaming): no deduction.

Book business and private subscriptions separately and, for mixed cases, briefly document your split; it saves arguments in a tax audit.

Booking it GoBD-compliant, ideally automatically

Software subscriptions create many small, recurring receipts from a wide range of providers. That is exactly where gaps appear: a forgotten PDF, input VAT never reclaimed, an overlooked reverse-charge subscription. The GoBD rules require a complete, unalterable record of every receipt.

Norman automatically detects whether a software receipt is a running expense or a licence, books it to the right account, reclaims the input VAT and handles foreign subscriptions correctly via reverse charge. For freelancers it flows into the EÜR, for companies into the annual accounts; see taxes for the self-employed and taxes for GmbH.

Frequently asked questions

Are software subscriptions like ChatGPT or Notion deductible?

Yes. Business-used SaaS subscriptions are running operating expenses and fully deductible in the year you pay, from ChatGPT Plus to Notion to your CRM. The proof is a proper invoice in your name or your company's name, downloaded from the provider's account.

Do I have to depreciate software or deduct it immediately?

You deduct SaaS subscriptions immediately; they are not a capital purchase at all. Even bought perpetual licences are deducted in full in the year of purchase in 2026, thanks to the ministry's one-year useful life. Multi-year depreciation effectively no longer applies.

Can I reclaim input VAT from a foreign subscription?

Yes, if you are standard-taxed and have stored your VAT ID: the provider invoices net, you report the German VAT via reverse charge and deduct it as input VAT in the same step. Without a stored VAT ID, foreign VAT is often charged, and you cannot reclaim that.

How do small-business owners book software?

As a small-business owner you deduct the gross amount as an expense and reclaim no input VAT. For foreign subscriptions you must still pay the reverse-charge VAT to the tax office but cannot deduct it, so it becomes a real cost.

Does a subscription with some private use still count?

Only the business share. A Microsoft 365 Family plan for the whole household or a personal streaming account is recognised proportionally or not at all. Purely business tools, by contrast, are 100 % deductible.

Conclusion

Deducting software is straightforward in 2026: SaaS subscriptions are operating expenses, fully deductible in the year you pay, and purchased licences likewise under the one-year ministry rule. Always reclaim input VAT, split private use cleanly, and for foreign subscriptions be sure to store your VAT ID so reverse charge runs cleanly and you don't give away foreign VAT. Collect the receipts with discipline and you'll get the maximum tax benefit from every tool.