Straight Line Depreciation in Northern Macedonia

Pls share insights into how straight line depreciation is treated under the tax code in Northern Macedonia. I want to know how assets are depreciated for tax purposes, including any limits or specific rates that apply to different types of assets. Appreciate quick responses. Thx

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Not sure it answers your question but as per PwC:

“Under the CIT Law amendments applicable as of 1 January 2019, the expenses for depreciation of the re-valuated amount of tangible and intangible assets are deemed as tax non-deductible expenses.

CIT is payable in case revaluation reserves of tangible and intangible assets are transferred into accumulated profit. The tax base is the transferred amount into accumulated profit less the amount of depreciation of the revaluated value of assets from 1 January 2019 until the date of write-off or disposal of the assets.

The depreciation expenses of assets are tax deductible if calculated within the statutory-prescribed depreciation rates and rules. Taxpayers should include in the tax base the portion of depreciation that exceeds the amount calculated based on the prescribed tax rates. At the end of December 2019, the government has published the Guidelines for depreciation rates and the methodology for calculating the depreciation for tax purposes.

On the other hand, based on the recent amendments, the taxation of depreciation became a temporary difference. Taxpayers are allowed to decrease the tax base in the following year for the amount of taxed depreciation in the previous tax period.

Furthermore, the write-off of the residual value of assets that can no longer be used is tax deductible, following an approval issued by the Macedonian tax authorities. Such approval is subject to submitting a request by the taxpayer by 31 January of the following year.”

 
Funniest

How many Northern Macedonian accountants that work for free do you think this forum has?

 

n North Macedonia, straight-line depreciation is a commonly used method for depreciating assets for tax purposes. Here's a breakdown of how assets are typically depreciated under the tax code:

1. Depreciation Rates and Categories

  • Buildings: Depreciated at a rate of 2.5% annually. This applies to buildings used for business purposes.
  • Machinery, Equipment, and Vehicles: Generally depreciated at a rate of 25% annually.
  • Computers, Software, and Office Equipment: Depreciated at a rate of 25% annually.
  • Intangible Assets: Depreciated based on the useful life as specified in the relevant agreement, or if not specified, at a rate of 10% annually.

2. Asset Classes and Depreciation Periods

  • Class I (Real Estate): Includes buildings, apartments, and other real estate structures. These are usually depreciated over a period of 40 years.
  • Class II (Machinery and Equipment): Includes heavy machinery, manufacturing equipment, and similar assets. The standard depreciation period is 4 years.
  • Class III (Vehicles and Office Equipment): Includes transportation vehicles and office equipment such as computers and furniture. The standard depreciation period is 4 years.

3. Limits and Special Conditions

  • Minimum Value Threshold: Assets with a value below a certain threshold (often around €500) may be fully expensed in the year of acquisition rather than being depreciated.
  • Adjustments for Residual Value: For assets that are expected to have a residual value at the end of their useful life, the residual value must be deducted from the asset's cost before applying the depreciation rate.

4. Tax Compliance

  • Depreciation must be calculated and reported in the financial statements according to the tax regulations.
  • The straight-line method requires that the same amount is deducted each year over the asset's useful life.

5. Changes and Updates

  • Tax regulations may be updated periodically, so it is essential to check with local tax authorities or consult with a tax advisor to ensure compliance with the latest rules.

This information provides a general overview, but specific applications can vary based on the asset type, industry, and any special provisions that might apply.

 

hi would you mind sharing source for this quote? / is there a table that shows how this works in various countries?

 

Here you go man, you can select any other country:

https:// taxsummaries . pwc .com /north-macedonia/corporate/deductions

(remove the spaces in the link above - only way the forum would let me post it)

 
[Comment removed by mod team]
 

Don’t understand the Mozambique link you are referring to, but I can tell you I’m cooking some dope sh*t. Pumping up my net profit margins with them Macedonian depreciation rules… Thanks guys

 

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