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%|
|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.