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6.3. Depreciation and Amortization

Business assets (except fine art, antiques, jewelry, trading stock and other business assets that are not subject to wear and tear) are depreciated either on straight-line method or under a diminishing value method.

As per Council of Ministers Proclamation of 24 August 2017, the following assets may only be depreciated under the straight-line method:

  • business intangibles; and
  • structural improvements of immovable property.

The depreciation rates applicable to a depreciable asset are specified as below:

Depreciable  Asset Straight-line Rate Diminishing Value Rate
Computers,  software, and data  storage  equipment 20% 25%
Greenhouses 10% -
Structural  improvement other than a greenhouse 5% -
Any other  depreciable  asset 15% 20%
Depreciable asset  used  in mining  and  petroleum development  operations 25% 30%

The depreciation rates for business intangibles are 25% for preliminary expenses, 10% if useful life is more than 10 years, and 100% divided by useful life otherwise.

Further, maintenance and improvement expenses exceeding 20% of the depreciation base of a category of business asset are considered as additions to the depreciation base of that category.