Baku: Annual depreciation rates for depreciable assets in Azerbaijan will now be determined using the straight-line method. This update is part of a proposed amendment to the Tax Code, which was deliberated at the Milli Majlis Committee on Economic Policy, Industry and Entrepreneurship’s recent meeting.

According to Azeri-Press News Agency, the draft outlines specific annual depreciation rates for various categories of depreciable assets. For capitalized costs related to land improvement, buildings, structures, and installations, the period is set at 44 years. Machinery and equipment are assigned a depreciation period of 14 years, while high-tech computing equipment has a lifespan of 11 years. Air, rail, and water transport vehicles are categorized under a 29-year depreciation period.

Additionally, production and sports vehicles, including cars, motorcycles, and bicycles, fall under a 9-year period. Service vehicles are set for a 19-year depreciation span, while motor vehicles and work animals both have a 14-year period. Costs associated with geological exploration and preparatory work for extracting natural resources have been categorized under an 11-year depreciation period. Intangible assets with unknown useful lives are given a 10-year depreciation period, and those with known useful lives will follow their respective years of use. Other fixed assets will also have a 14-year depreciation period.

The amendment also specifies that depreciation deductions using the declining balance method will be applied separately for each building, structure, or installation. In contrast, deductions using the straight-line method will be calculated separately for each depreciated asset.