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6.3. Depreciation and Amortization

Fixed assets are depreciated using straight-line method over the useful life of the asset from the date of purchase.

The following main depreciation rates are specified under the tax code:

Plantations 5%
Commercial, industrial buildings, factories 5%
Temporary buildings 20%
Fixed equipment and tools 5% - 20%
Factory equipment, machine tools 20%
Transport equipment  15% - 25%
Office furniture, fixture, fittings, installations 10%
Air conditioners 25%
Computing equipment 33.33%
Small tools with a unit value of assets less than DJF 100,000 100%

The company is allowed to deviate from the statutory depreciation rates provided under the tax code subject to justification on the characteristics or conditions of use. However, the depreciation rate used by the company should not deviate by more than 20% from the specified statutory rate.

Depreciation is not allowed on buildings used for rental purpose.

Depreciation of equipment (except residential buildings, building sites and premises) can be computed using a declining balance method. The rate for the calculation of the declining balance is obtained by multiplying the linear depreciation rate corresponding to the normal duration of use of asset by a coefficient fixed at 2 (duration of use is five years) and 2.5 (duration of use is more than five years).