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6.3. Depreciation and Amortization

Depreciable assets are amortized over their useful life using the straight-line method. The taxpayer can, instead, apply either the accelerated method or the declining balance method, subject to prior approval by the tax administration. Accelerated depreciation is ordinarily restricted to new equipment and material with a useful life exceeding 5 years, and exclusively used in industry, manufacturing, maintenance or transport. Also specific telecom equipment so qualifies (see below).

Depreciation must be booked also in loss-making years, in which case the part of the loss corresponding to the depreciation booked may be carried forward without time limit (see Sec. 7).

Cell phone licenses granted by the government are depreciable over their use duration. Specific telecom equipment acquired by enterprises with a telecom operating license qualify for accelerated depreciation. From 2017, assets acquired through a lease arrangement can be depreciated over the duration of the lease contract rather than over their (longer) useful life.

The following outlines the various asset types and their applicable rates.

Buildings 5%
Light construction 10%
Loud machinery 10%
Stationary machinery 20%
Fixtures 10%
Office and home chattels 10%
Office equipment 20 to 25%
Motor vehicles 33.33%
Other specified vehicles and engines 20 to 25%
Computers and software 50%