Loads up for trench and manure silos

Until now, a trench and manure silo could still be regarded as an independent business asset. However, the Supreme Court has changed this by ruling on Friday 17 January. The judge has decided that the trench and manure silo must be attributed to the company buildings with regard to depreciation. 

The Association of Accountants and Tax Consultancy Firms had initiated this procedure, as it had been unclear for years whether a manure and trench silo is an independent business asset or whether it should be regarded as an annex to the company buildings.

The Supreme Court has now decided that from now on investments in trench and manure silos must be allocated to the company buildings. As a result, they must also be written off as such. This leads to additional administrative costs and a lower depreciation potential for an agricultural entrepreneur.

Additional charges
The problem is that as of 1 January 2007 it was decided that industrial buildings, depending on the company structure, may be depreciated up to a maximum of 50% of the WOZ value. Since Friday, this also includes the trench and manure silos, which were allowed to be depreciated as independent operating assets up to their residual value. This leads to a lower depreciation potential.

According to Bert van den Kerkhof, of ABAB Accountants and Advisers, the ruling also leads to additional administrative costs. A trench silo, for example, cannot simply be linked to 1 company building. This is because on most farms there is no separate silo for the young stock barn and another silo for the free stall barn.

As a result, the silo has to be allocated divided over the stables and this can differ from year to year. As a result, the WOZ value can also deviate from year to year. "All this is administratively a disaster and the extra costs can therefore be a few 100 euros," says Van den Kerkhof. 

© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.