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6.3. Depreciation and Amortization

Depreciation is calculated on the cost of acquisition or production of goods, which include expenses incurred in connection with the purchase, transport, introduction to the country, facilities, assembly, and similar which are necessary to place the property in condition to be used.

As a general rule, depreciation and amortization are allowed under the straight-line method at the following rates:

Buildings   40 years 2.5%
Office furniture and fixtures 10 years 10.0 %
General machinery  8 years 12.5 %
Equipment and facilities  8 years 12.5 %
Banks and boats in general 10 years 10.0%
Motor vehicles  5 years 20.0 %
Planes   5 years 20.0 %
Used heavy   5 years 20.0 %
Agricultural machinery 4 years 25.0 %
Working animals  4 years 25.0 %
Tools generally  4 years 25.0 %
Widgets and female pure pedigree or crossbred 8 years 12.5 %
Computer equipment  4 years 25.0 %
Irrigation canals and wells 20 years 5.0 %
Ponds10 years10.0 %
Fences, gates10 years 10.0 %
Staff housing20 years 5.0 %
Furniture and fixtures in staff housing 10 years 10.0 %
Silos, warehouses and sheds20 years5.0 %
Sheds and wooden sheds5 years20.0 %
Sheds and metal sheds 10 years 10.0 %
Facilities electrification and rural telephony10 years10.0 %
Roads inside 10 years 10.0 %
Sugarcane5 years 20.0 %
Vines 8 years 12.5 %
Fruit 10 years 10.0 %
Oil wells 6 years 20.0 %
Pickup linesthe oil industry 5 years 20.0 %
Field equipment oil industry 8 years 12.5 %
Processing plants the oil industry 8 years 12.5 %
Pipelines oil industry 10 years 10.0 %

Amortization of intangible assets with an actual cost, including the cost actually paid for oil and mining rights, from the time the company started its operation to generate taxable income, will be amortized over five (5) years. The cost on which amortization is computed shall be equal to the purchase price plus costs incurred to put the intangible property in the service of the company.

Start-up expenses, not exceeding 10% of paid-up capital, may be deducted in the first year or may be written off over a period of 4 years.

COVID-19 Emergency Measures

Bolivia announced economic recovery measures from the COVID-19 pandemic, whereby corporate taxpayers (excluding mining and hydrocarbon extractive enterprises) are allowed to voluntarily apply an accelerated depreciation method for fixed assets acquired between 1 April and 31 December 2020. The accelerated depreciation method allows a reduction in the standard useful life of the asset to its half, which is to be applied from the asset first put to use.