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El Salvador — Orbitax Country Chapters
6.3. Depreciation and Amortization

When calculating Salvadoran taxable income, assets owned by an enterprise are normally depreciated over their normal useful using the straight-line method. Assets with a useful life of a year or less can be fully written off in the year of acquisition.

The applicable rates for various assets types are as follows

Buildings 5%
Machinery 20%
Vehicles 25%
Other movable property 50%

Used Machinery and Movable Property

When depreciating used machinery and other movable property, only a portion of the cost of the asset is depreciable for tax deductions purposes. The tax deductible portion is based on the useful life of the asset at the following percentages:

1 year but less than 2 80%
2 years but less than 3 60%
3 years but less than 4 40%
4 or more years 20%

Intangible Assets

Aside from software, intangibles assets such as goodwill, trademarks, copyrights, etc. may not be amortized for tax purposes.

For new software, the maximum amortization rate is 25% of the acquisition or development cost. Note, that the depreciable portion rules for used machinery also applies to used software.