Expenditure Required To Meet Safety Standards

Expenditure allocated to improving the safety of equipment - conditions relating to deductions for tax purposes - classification as a fixed asset - depreciation method

Many companies incur expenditure in order to improve the safety of their facilities and to comply with the provisions of the decree dated January 11, 1993, which transposes into French law an EU directive dated November 30, 1989.

1. The tax authorities have adopted a very strict position in this respect and recommend that such expenditures be systematically treated as fixed assets to be depreciated, as opposed to operating expenses which can immediately be deducted from the taxpayer's taxable income (Rep. Roques, A.N. December 30, 1996, p. 6874, no. 43987).