Depreciation is allowed on capital assets (except land and intangibles, like goodwill) owned by the business and used for its operations. Assets are to be depreciated over their useful life using straight-line method at the rates specified in the tax law.
Examples of depreciation schedules provided for under the Tax Code include the following:
For leased assets, the lessor is entitled to depreciation and such assets must be depreciated over their useful life regardless of contract duration if consisting of immovable property, and over lease contract duration if consisting of movable property.
New equipment is eligible for depreciation according to the declining-balance method. Under this method, the relevant asset is depreciated based on its useful life as multiplied by a coefficient. The coefficient is 1.5 if useful life is 3 or 4 years, 2 if useful life is 5 or 6 years, and 2.5 if useful life is 7 years or more. In order to be eligible for declining-balance depreciation, the relevant asset must be:
- Destined for use in a manufacturing, maintenance, transport, fishing or farming business; and
- Destined for use in Guinea for at least 3 years.