The one question everything hangs on
A container costs anywhere between a few thousand and several tens of thousands of euros. Anyone using it commercially wants to deduct the cost – and this is exactly where the tax treatment splits into two entirely different worlds.
If the container is a movable asset, it is depreciated over a comparatively short useful life, may under certain conditions be treated as a low-value asset or in a pooled item, and is an ordinary disposal on sale.
If it is a building or part of a building, the long building depreciation applies, it becomes part of the land, affects property tax and can play a role when the plot is later sold.
The distinction turns essentially on whether the container is firmly connected to the ground and intended to stay there permanently. What counts is not the manufacturer’s label but the actual circumstances.
| Feature | Points to a movable asset | Points to a building |
|---|---|---|
| Foundation | Point footings, strips, simply set down | solid strip or slab foundation |
| Servicing | site power, mobile connections | fixed connection to sewer, water, heating |
| Standing time | limited, repeatedly relocated | permanently at the same place |
| Transportability | movable by crane at any time | only after substantial dismantling |
| Building law treatment | procedure-free, temporary | approved as a building |
| Common perception | site container, storage box | residential or office building |
In practice it usually plays out like this: a site or storage container that gets relocated is a movable asset. A residential or office container set on a foundation, connected up and standing there permanently tends towards building status. Between the two lies a broad grey zone that the tax office assesses in case of doubt – which is why this question should be settled with your tax adviser before the purchase, not when preparing the accounts.
Depreciation period
The customary useful life follows the official depreciation tables. The values below are common orientation figures; what governs is the classification in the individual case.
| Classification | Usual useful life (orientation) | Type of depreciation |
|---|---|---|
| Site containers | approx. 8–10 years | straight-line, movable |
| Storage and material containers | approx. 10–15 years | straight-line, movable |
| Office container as a movable asset | approx. 8–10 years | straight-line, movable |
| Container as an operating fixture | approx. 10–15 years | straight-line, movable |
| Container as a building, commercial | 33 1/3 years (3% p.a.) | building depreciation |
| Container as a residential building | 50 years (2%) or 33 1/3 years (3%) depending on completion | building depreciation |
The difference is substantial: €20,000 of acquisition cost yields roughly €2,000 of depreciation per year over ten years, but only around €600 over 33 1/3 years. For liquidity in the early years that is a noticeable effect.
Two special rules are worth checking:
Low-value assets. Where net acquisition costs fall below the low-value asset threshold, immediate write-off is possible. A complete container generally no longer reaches that threshold – but individual, independently usable items of equipment may. The thresholds are adjusted by legislation; please check the current figure.
Investment deduction and special depreciation. Smaller businesses can, under conditions, bring forward part of the planned acquisition costs and additionally claim special depreciation. This requires predominantly business use and compliance with retention periods – so no selling shortly afterwards.
VAT and input VAT
When buying a container for the business, the VAT included is in principle deductible as input VAT, provided you are entitled to deduct and the container is used for taxable supplies. A proper invoice with all mandatory details is a precondition.
Key constellations:
| Situation | Input VAT | Note |
|---|---|---|
| Purchase for the business, fully taxable use | fully deductible | proper invoice required |
| Hiring a container | fully deductible | monthly with the invoice |
| Small business scheme | no deduction | the gross price is the expense |
| Partly private use | pro rata | document the split |
| Letting residential space | generally no deduction | residential letting is VAT-exempt |
| Letting as storage or office to a business | option to tax possible | input VAT deduction then possible |
| Purchase from a private seller / margin scheme | no VAT shown | compare prices, not just net/gross |
The last point is often overlooked with used containers: an offer from a private seller or under the margin scheme contains no separately stated VAT. For a buyer entitled to deduct input VAT, an apparently more expensive dealer offer with VAT shown is therefore frequently cheaper than the lower private purchase.
If the use changes substantially later – say from taxable business use to VAT-exempt residential letting – an input VAT adjustment can apply. The adjustment period is usually five years for movable assets and ten years for land and buildings.
Property tax
Property tax attaches to real property. A mobile container is normally not subject to property tax – it is business equipment, not real estate.
The picture changes when the container becomes a building, that is, firmly connected and permanently installed. It can then enter the valuation of the plot and increase property tax. For a residential container on your own land, expect this as soon as it is approved as a residential building under building law.
Practical consequence: the “movable or building” question affects not only depreciation but several things at once – income tax, property tax and, on a later sale, the valuation of the plot. It should therefore be answered consistently and with reasoning. It helps the argument if the building law treatment and the tax classification align; see Building application and change of use.
Letting containers as a source of income
Letting containers produces different categories of income depending on how it is structured:
- Commercial letting is likely where the letting is combined with services, is short-term, or is carried on at scale – typical for hiring out site and storage containers. Trade tax then applies alongside income tax, with the allowance for sole traders and partnerships.
- Asset-managing letting comes into consideration where a container is provided on a long-term basis without significant additional services.
The distinction is delicate in individual cases and has consequences for trade registration, trade tax and bookkeeping duties. Here too: clarify beforehand.
A second point concerns the intention to make a profit. If a container is let at a loss for years, the tax office may assume a hobby activity and refuse to recognise the losses. A plausible forecast calculation at the outset is therefore not a formality but the basis for recognition.
Private use and letting to yourself
Where a business container is also used privately, the private share must be recorded as a withdrawal and taxed. With mixed use the business share should be documented – for instance through an occupancy plan, a usage agreement or photographic records.
Arrangements where a container is let to close relatives or to your own company are subject to the arm’s length test: written contract, market rent, actual performance with regular payment. If one of these is missing, the contract is frequently not recognised for tax purposes.
What you should keep
| Document | Why it matters |
|---|---|
| Purchase contract and invoice | acquisition cost, input VAT, start of depreciation |
| Delivery note with date | date of commissioning for depreciation |
| Foundation and installation records | argument for movable versus building |
| Photos of the installed condition | evidence of the actual circumstances |
| Hire and usage agreements | allocation of income, arm’s length test |
| Records of relocations | supports classification as movable |
| Transport and installation costs | usually count as incidental acquisition costs |
The last point is often posted incorrectly: transport, crane and installation are as a rule incidental acquisition costs and are depreciated with the asset rather than expensed immediately. Later repairs, by contrast, are current expenses, while a substantial improvement – a subsequent full fit-out, say – may have to be capitalised.
Important note
This article contains general information and does not constitute tax advice. The tax classification of a container depends on the specific facts and is assessed by the responsible tax office. Useful lives, thresholds, tax rates and deadlines change through legislation and case law; all figures given are rough orientation values without guarantee and without any claim to being current. For your specific situation, please consult a qualified tax adviser.
Conclusion
The tax treatment of a container turns on the distinction between a movable asset and a building – and thereby between roughly eight to fifteen years and more than thirty years of depreciation. Foundation, connections, standing time and the building law treatment are the features that decide it. Settle the classification before you buy, document the actual circumstances, and with used offers check whether any VAT is stated at all.
Further reading: Purchase contract and warranty, Hiring versus buying a container and Insuring a container.