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. Also
from 1 April 2011, depreciation allowances on most building
structures cannot be claimed, however depreciation can still be
claimed on a wide range of commercial and industrial building
fit-out assets. For more information, please click here.
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
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
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