Business Taxation, Depreciation, Exceptional Depreciation, Asset Disposal, Tax Deductibility, Business Equipment, Taxation Rules
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Abstract
Extract
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Abstract
Understand depreciation and its deductibility, exceptional depreciation, and asset disposal for business taxation purposes.
Extract
[...] This asset belongs to the fixed assets and the law allows for an exceptional depreciation over 12 months. Therefore, the asset is eligible for this type of depreciation. STEP N°2 - CALCULATION OF FISCAL DISTORTION 1. DEPRECIATION - LINEAR: over a period of 3 years, the allocation is 1000? (3000/3) ? the accounting profit has therefore already decreased by 1000?. 2. TAX DEPRECIATION - SPECIAL: the law authorizes a deduction total from the 1stère year, so it is 3000?. 3. [...]
[...] If we deduct less, the difference is definitively lost. STEP N°2 - CHOICE OF METHOD - MANAGEMENT DECISION 1. LINEAR DEPRECIATION - ART. 214-12 PCG - COMPREHENSIVE DEPRECIATION - COMMON LAW - REAL DEPRECIATION : constant annuity - starting point: in service. CALCUL: BASE x 100%/USAGE DURATION. PRORATA TEMPORIS: on calculate in real days (360j). 2. DEPRECIATION OVER TIME - ART A CGI - FISCAL DEPRECIATION - NORMAL WEAR AND TEAR: decreasing annuities for new assets (linear for used assets) with a duration of 3 years or more (article 22 annex II). [...]
[...] CESSION: for the depreciation we make the pro rata temporis with regard to the duration of use. STAGE N°3 - DEPRECIATION BY EXCEPTION If the ENT chooses the mode dégressif, the analysis must be the following: ART. 39-1-2° - CGI: if the accounting depreciation is less than the fiscal depreciation, the ENT must perform a derogatory depreciation. This is a tax aid that allows you toreduce the taxable profit from the first years. --CALCUL : the studio buys a machine for 10,000?. 1. LINEAR DEPRECIATION: 2000? 2. DEPRECIATION DEGRADABLE: 3500? [...]
[...] this is the derogatory depreciation. =generates immediate tax savings. STEP N°3 - POINT OF VIGILANCE ART B - CGI: The company has properly recorded the minimum depreciation in accounting, the condition of the minimum mandatory depreciation is therefore respected. WHAT ABOUT THE DECOMPOSED ASSET My de Matcha buys an eco-friendly storage building for 100,000 - Structure : ? (amortized over 20 years). - Insulating Roof : ? (amortized over 10 years). Bonus : The law allows for an exceptional depreciation of 100% in the first year for ecology. [...]
[...] GLOBAL BASE: The exceptional depreciation is calculated on the total return on investment. Without deduction of residual value. In this case, well that the building is decomposed into structure and components to reflect different wear-out periods, the exceptional depreciation device applies to the economic unit which constitutes the fixed asset. Consequently, the exceptional annuity will be calculated on the total base of ?100,000, without distinction of components. The entire cost price will be deducted from the fiscal result as of the commissioning exercise. [...]
