Tax Related Laws & Regulations

Enforcement Rules of the Income Tax Act

Article 48

Article 48

Depreciation methods for fixed assets stated in Article 51 of the Act are as follows:

1. Where the average method is adopted, the balance amount of the fixed asset cost minus the salvage value equally shared according to the years of durability prescribed in the Table of the Service Life of Fixed Assets shall be used to calculate the depreciation amount for each period.

2. Where the fixed-rate progressive decrease method is adopted, the balance amount order of the depreciation amount for each period subtracted from fixed assets for each period shall be used as the basis for calculating depreciation for each time/period, and a fixed percentage shall be used to calculate the depreciation amount.

3. Where the sum-of-years`- digits method is adopted, the balance amount of the fixed asset cost minus the salvage value multiplied by a decreasing fraction where the denominator is the sum of the years` digits of the service life and the numerator is the digit of the year of use in a reverse order shall be used to calculate the depreciation amount for each period. However, the years of the service life shall not be shorter than the years of durability prescribed in the Table of the Service Life of Fixed Assets.

4. Where the production quantity method is adopted, the balance amount of the fixed asset cost minus the salvage value shall be divided by the estimated total production quantity to calculate the depreciation amount per unit of production, and then multiplied by the actual production quantity realized in each period to calculate the depreciation amount for each period. However, the period of the estimated total production quantity shall not be shorter than the years of durability prescribed in the Table of the Service Life of Fixed Assets.

5. Where the working time method is adopted, the balance amount of the fixed asset cost minus the salvage value shall be divided by the estimated total working time to calculate the depreciation amount to be assumed in each unit of working time, then multiplied by the actual working time used in each period to calculate the depreciation amount for each period. However, the estimated total working time shall not be shorter than the years of durability prescribed in the Table of the Service Life of Fixed Assets.

1. Where the average method is adopted, the balance amount of the fixed asset cost minus the salvage value equally shared according to the years of durability prescribed in the Table of the Service Life of Fixed Assets shall be used to calculate the depreciation amount for each period.

2. Where the fixed-rate progressive decrease method is adopted, the balance amount order of the depreciation amount for each period subtracted from fixed assets for each period shall be used as the basis for calculating depreciation for each time/period, and a fixed percentage shall be used to calculate the depreciation amount.

3. Where the sum-of-years`- digits method is adopted, the balance amount of the fixed asset cost minus the salvage value multiplied by a decreasing fraction where the denominator is the sum of the years` digits of the service life and the numerator is the digit of the year of use in a reverse order shall be used to calculate the depreciation amount for each period. However, the years of the service life shall not be shorter than the years of durability prescribed in the Table of the Service Life of Fixed Assets.

4. Where the production quantity method is adopted, the balance amount of the fixed asset cost minus the salvage value shall be divided by the estimated total production quantity to calculate the depreciation amount per unit of production, and then multiplied by the actual production quantity realized in each period to calculate the depreciation amount for each period. However, the period of the estimated total production quantity shall not be shorter than the years of durability prescribed in the Table of the Service Life of Fixed Assets.

5. Where the working time method is adopted, the balance amount of the fixed asset cost minus the salvage value shall be divided by the estimated total working time to calculate the depreciation amount to be assumed in each unit of working time, then multiplied by the actual working time used in each period to calculate the depreciation amount for each period. However, the estimated total working time shall not be shorter than the years of durability prescribed in the Table of the Service Life of Fixed Assets.

Update：2018-04-20