Tax Facts
Depreciation Allowances
Depreciation allows for the wear and
tear on a fixed asset and must be deducted from your
income.
Generally you must claim depreciation on fixed assets
used in your business that have a lifespan of more than
12 months. However in special circumstances you can
elect not to depreciate an asset by applying to the
IRD.
Not all fixed assets can be depreciated. Land is a common
example of a fixed asset that cannot be depreciated.
You will have to keep a fixed asset register to show
assets you will be depreciating. This should show the
depreciation claimed and adjusted tax value of each
asset. The adjusted tax value is the asset's cost price,
less all depreciation calculated since purchase.
To view the depreciation rates and the methods for calculating
depreciation, please refer to the IRD
Depreciation Guide.
To find out more on how to calculate depreciation on
a business asset please give us a call or refer to the
IRD
Depreciation Rate Finder on the IRD Website.
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