Forming the IAB now: which tax deadlines and time windows count in 2026/2027

Anyone weighing a direct participation in a battery storage system in 2026 is not making one decision but four, and each has a date. The investment deduction (Investitionsabzugsbetrag, IAB) has to be formed in the right tax year, the investment must follow within three years, the declining-balance depreciation applies only to assets acquired through the end of 2027, and the storage system's grid-fee exemption hinges on the date of commissioning. This article sorts the four time windows from the investor's point of view, as a tax and project calendar, not as a sales pitch. As of July 2026.

One thing up front: “now” here is not marketing but a set of concrete statutory deadlines. That is exactly why this article closes with a full section on what argues against rushing, because time pressure as a sales argument is a warning sign, not a reason to buy. The market-side “why now?” question (build-out, negative power prices, grid bottlenecks) is answered by Germany's battery storage market: the numbers, the drivers, and why "now" has a date; here the focus is on the tax and project dates.

By when must I form the investment deduction?

You form the IAB with the tax return for the year whose profit it is meant to reduce, the so-called deduction year (Abzugsjahr). To lower your 2026 profit, you form the IAB in the 2026 assessment, not later. That is the real timing lever: the deduction takes effect in the year in which the profit actually arises, whether from an ongoing business, a commercial participation, or a one-off event such as a severance payment.

Contrary to how it is often portrayed, 31 December is not a hard wall. The election under §7g EStG is not tied to the calendar year-end; it can be exercised as long as the tax assessment for the deduction year has not become final and binding (bestandskräftig), so in particular within the objection period, or where the assessment is still open, and under certain conditions even after the asset has already been acquired. Case law draws the line only where a subsequent claim is evidently used merely to offset additional tax from a later audit.

In practice this means: anyone planning the effect cleanly decides before the turn of the year, but at the latest before the assessment for the deduction year becomes final. Where the IAB actually goes in the return (Anlage EÜR, e-balance sheet, or the partnership's assessment return) is shown by The IAB in your German tax return: where and how to actually claim it; which requirements must be met at all is set out in Investitionsabzugsbetrag: all §7g EStG requirements, and who can use it.

How long do I then have to actually invest?

After forming the IAB, three business years remain to actually make the planned investment (§7g(3) EStG). Anyone forming the IAB for 2026 must therefore acquire by the end of 2029. This deadline is deliberately generous; it allows time to find a suitable project rather than taking one on under time pressure.

If no investment is made within the three years, the IAB is reversed retroactively in the deduction year: the tax saved back then is repaid, plus interest at currently 1.8% per year (0.15% per month, §233a in conjunction with §238(1a) AO), running from 15 months after the end of the deduction year. The IAB is therefore not a gift but a tax-deferral instrument with a repayment risk. How the reversal works in detail and what it costs in euros is calculated in Reversing the IAB: what happens if you don't invest, deadlines, interest, ways out.

The declining-balance window: why 31 December 2027 is a hard date

Unlike the IAB, the declining-balance depreciation is bound to a fixed end date: it applies only to movable fixed assets acquired after 30 June 2025 and before 1 January 2028. For acquisitions from 2028 onward it no longer exists as things stand today, unless the legislator extends the window. What counts here is not the year the IAB is formed, but the year of the actual acquisition.

Under the 2025 tax investment stimulus programme (Investitionssofortprogramm), the declining-balance AfA is up to three times the straight-line rate, but no more than 30% per year (§7(2) EStG). For battery storage that is the top tier: with a ten-year useful life, the straight-line rate is 10%, and three times that hits exactly the 30% cap. A solar PV system with a twenty-year useful life, by contrast, reaches only 15%. So the storage system exploits the window fully, as long as the acquisition falls by the end of 2027. The full comparison with the special depreciation and the year-one calculation is shown in Sonder-AfA §7g (5) vs. declining-balance AfA §7 (2): which combination, when?.

This is precisely where the real timing tension arises: the IAB investment period would run until the end of 2029, but the declining-balance AfA expires two years earlier. Anyone who wants to capture the full double lever of special depreciation plus declining-balance AfA therefore aligns the acquisition not with the latest IAB date (2029) but with the declining-balance window (2027).

The grid-fee exemption under §118 EnWG: by when must the storage system be on the grid?

Battery storage systems commissioned by 4 August 2029 are exempt for 20 years from grid fees on their electricity draw under §118(6) EnWG. That is a substantial cost advantage, because without the exemption a storage system would be charged like an end consumer when charging. What matters here is neither the IAB formation nor the acquisition, but the actual commissioning of the project.

That date, however, is subject to review. The Federal Network Agency (Bundesnetzagentur) is reorganising grid fees for storage with its AgNeS reform; under the final draft determination of 6 August 2026, grandfathering requires, next to commissioning by 2029, a final investment decision (FID) before publication of the determination, expected around the turn of 2026/27. For new projects, the relevant cut-off thus effectively lies before 2029. This is an ongoing regulatory process, not settled law; the mechanics of the exemption and the grandfathering rules in detail are explained in Grid fees for battery storage: the exemption until 2029 and the AgNeS reform, and the change risk as such in Risks in BESS direct investments, and how they are structurally addressed.

How the four windows interact

From the investor's perspective the four windows form a clear calendar, with an order and a binding bottleneck. The IAB comes first and is the most flexible; the declining-balance window (end of 2027) is in practice the tightest date, because it closes earlier than the IAB investment period and carries the largest additional lever. The overview below summarises this:

What argues against rushing

As concrete as the dates are, they are a calendar, not buying pressure. The most expensive mistake is not a missed window but a wrong participation entered into only to hit a window. Three points therefore belong in every timing decision:

• A weak project stays weak, even with a tax advantage. Grid connection, location, contract quality, and the provider's integrity decide the outcome over 20 years, the tax windows only over the first year. How to recognise a serious provider is shown by How to tell a trustworthy provider of energy direct investments.
• An IAB without a solid investment plan is expensive. If the investment is not made in time, the advantage reverses: retroactive repayment plus interest. The IAB should be formed when a concrete project is realistically within reach, not on spec.
• Time pressure as a sales argument is a warning sign. Genuine statutory deadlines are public, dated, and verifiable; artificial scarcity (“only this week”) is not. Anyone who confuses the two makes the decision for the wrong reason.

The IAB's three-year investment period exists for exactly this: it lets you secure the tax advantage now and still make the project selection calmly. Good timing here means deciding early, not signing quickly. How to build a diversified portfolio methodically over several years from this is shown by Using the investment deduction every year: building a portfolio over multiple years. Whether and when forming an IAB pays off for your tax year is something we clarify in a non-binding first call, together with your tax adviser if you wish.

Checklist: your tax and project calendar

1. Determine the profit year: in which year does the profit arise that the IAB is meant to reduce, an ongoing business, a participation, or a one-off event such as a severance? That is your deduction year.
2. Check the IAB requirements: a business with profit income, the €200,000 profit limit per business, a planned movable asset used at least 90% for business purposes (almost exclusively, §7g(4)). Details in Investitionsabzugsbetrag: all §7g EStG requirements, and who can use it.
3. Form the IAB in good time: with the tax return for the deduction year, at the latest before the assessment becomes final.
4. Align the acquisition with the declining-balance window: for the full double lever, plan the acquisition by 31 Dec 2027, not only at the end of the three-year IAB period.
5. Keep commissioning and §118 EnWG in view: tie the grid-fee exemption to commissioning and check the current regulatory status.
6. Involve your tax adviser: deadlines, elections, and the combination with the one-fifth rule (§34 EStG) for one-off events are case-by-case; clarify before forming the IAB.