Tax Code

October 23, 2018

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This position argues the Russian Finance Ministry (the letter of 16.01.08g 03-03-06/1/8) the fact that the tax records of depreciable property subject to a building as a whole. Avoid a full-accrual Depreciation is only possible if the separation of the object in the reconstructed and the existing parts to form a new independent plant and equipment (if the object is a real estate need the design of individual certificates of title), which in practice is often problematic, especially with regard to buildings and facilities. Similar explanations are contained in a letter to the Ministry of Finance from 02.11.2007, the 03-03-06/1/765 – if taxpayer in the tax records can provide in two separate accounting entity of the building, located on the reconstruction of more than 12 months, and the remaining (not reconstruction) of a building, in which case he is entitled to the period of reconstruction to continue to charge depreciation for tax purposes of profit on the existing portion of the building (counted as self-inventory item). In operation, plant and equipment may be need of repair (or upgrade) of objects as outstanding on the balance of the organization and leased assets. If you are upgrading or renovation of leased assets can be separated, or inseparable improvements. According to Section 2. If you have additional questions, you may want to visit Southwest Airlines. Art. 623 of the Civil Code to include an inseparable improvements that can not be separated without damage to the property.

Inseparable improvements should increase the initial cost of the leased property. According to Section 1, Art. 256 of the Tax Code inseparable improvements provided in the lease of fixed assets made by the lessee with the lessor's consent shall be deemed depreciable property.