Accelerated Depreciation According To The Declining Balance Method

Temporary Increase Of The Rates

1. The coefficients of accelerated depreciation to be retained for fixed assets purchased or produced between February 1st, 1996 and January 31, 1997 increase by one point. When a company intends to depreciate, following the accelerated method, a good purchased or produced during this period, it must in principle apply these increased rates.

Obviously, the regime of accelerated depreciation remains optional. The decision of a company to depreciate an element of its asset according to a straight line method or an accelerated method is, from a tax standpoint, a management decision, which must be made good per good.

2. Several companies wonder whether they may renounce the application of increased rates of accelerated depreciation, and therefore determine their allowances according to the previous rates. During a meeting of the tax committee on administrative organisation, the Tax Authorities answered positively when questioned on this subject.