What is Depreciation? — Rates and calculation for businesses
Depreciation is the systematic allocation of a long-term asset's purchase cost (equipment, vehicles, software) over its useful life. It's an expense that reduces the tax base without actual cash outflow.
Definition
Depreciation is the systematic allocation of a long-term asset's purchase cost (equipment, vehicles, software) over its useful life. It's an expense that reduces the tax base without actual cash outflow.
Details
Tax-recognized annual rates: buildings 5%, machinery/equipment 20%, computers 25%, vehicles 20%, software 33.3%, furniture 10%. Method: straight-line (equal annual amounts). Assets under 10,000 MKD can be fully expensed in the year of purchase.
Example
You buy a laptop for 60,000 MKD. Annual depreciation at 25% = 15,000 MKD. In 4 years the laptop is fully depreciated. Each year 15,000 MKD is a tax-deductible expense.