“Announcement of State Administration of Taxation on Issues Concerning Taxation Policies on the Accelerated Depreciation of Fixed Assets” (“Announcement”) has come into force
In order to relieve the financial pressure for the enterprises during the economic restructuring and self-development period, SAT has released the Announcement recently, which will be applied in or after 2014. The main contents include:
The application scope has been clarified
The applicable industries include biopharmaceutical manufacturing, specialized equipment manufacturing, manufacturing of railway, vessel, aerospace and other transportation equipment, manufacturing of computer, communication equipment and other electronic equipment, manufacturing of instruments and meters and information transmission, software and information technology services.
The applicable enterprises which the main business income is above 50% (exclude 50%) of the whole income in the year when the fixed asset is put into use.
The applicable assets are the fixed assets purchased after January 1st 2014 (including self-constructed ones )
The depreciation methods have been clarified
The depreciation years are allowed to be shortened by 60% of the mandatory depreciation years, and no less than 60% of the corresponding depreciation years as prescribed by the “Law on Enterprise Income Tax”.
The accelerated depreciation under the double declining balance method or under the sum of the years digits method The acceleration of depreciation may be adopted.
The transition between the Announcement and the previous requirement on the acceleration of depreciation
Where the enterprise has met the requirements for the acceleration of depreciation stipulated in the Announcement and the previous requirement, the enterprise shall be entitled to choose the more favorable one.
In addition, Announcement has stipulated on the acceleration of depreciation related to the instruments and equipment for research and development, the Fixed assets with unit value of no more than CNY5,000.