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The tax depreciation schedule for tangible assets: cost, entry into service, ministerial rates and disposal
The module’s worked examples, then cases to attempt before revealing their solution · 6 sections · 600 words · 7 min
Worked example
The tax cost of an industrial oven
A bakery buys an oven for 30,000 euros, pays 1,200 euros for delivery and 800 euros for installation, and funds the purchase with a loan that costs 900 euros of interest in the first year. The depreciable cost is 30,000 + 1,200 + 800 = 32,000 euros. The interest stays outside: it is deducted under the separate rules on interest expense.
Worked example
A schedule with an assumed 20% rate
A company puts a 50,000-euro piece of equipment into service in 2026. Assume, purely for illustration, a table rate of 20%. The maximum charge for 2026 is 50,000 × 10% = 5,000 euros. From 2027 to 2030 it is 10,000 euros a year. In 2031 the remaining 5,000 euros are deducted as the closing charge.
Worked example
Accounts that move faster than tax
An SRL depreciates a 60,000-euro plant over four years in its accounts, booking 15,000 euros a year after the first. With an assumed rate of 12.5%, the full-year tax maximum is 7,500 euros. Each year 7,500 euros are added back, and they will be recovered once the accounts have finished depreciating the plant.
Worked example
A van written off after an accident
A delivery firm owns a work vehicle that cost 36,000 euros, with 21,600 euros already deducted. In June 2026 the vehicle is destroyed and scrapped, with no insurance payout. The residual cost of 36,000 − 21,600 = 14,400 euros is deducted in full in 2026, instead of across the two years the schedule still had to run.
Practical case
Marco's lathe and the extraction system
In November 2026 Marco's SRL buys a lathe for 40,000 euros plus 2,000 euros for delivery and assembly, and puts it into service in March 2027. In the same month it buys an extraction system for 24,000 euros and starts using it straight away. For this exercise only, assume a table rate of 15% for both assets. The 2026 accounts book a charge of 3,600 euros on the extraction system. How much depreciation is deductible for tax in 2026, and what adjustment does the return need?
Hint: For each asset, ask whether it entered service in 2026, then apply the reduced first-year rate and compare the result with the charge booked in the accounts.
Show the solution
Lathe: it enters service in 2027, so it yields no charge in 2026, even though its tax cost of 42,000 euros is already fixed. Extraction system: in service from 2026, first year at half rate, 24,000 × 7.5% = 1,800 euros. The accounts booked 3,600 euros, so the 1,800-euro difference is added back in 2026 and will be recovered in the closing years of the tax schedule.
Answer: 1,800 euros deductible, 1,800 euros added back
Practical case
A schedule cut short by scrapping
A craft business keeping full accounts put an 18,000-euro machine into service in 2023, with an assumed rate of 20%, and has always booked the tax maximum in its accounts. In September 2026 the machine suffers an irreparable breakdown and is scrapped, with a report from the disposal centre. How much can the business deduct for that machine in 2026?
Hint: Rebuild the charges deducted from 2023 to 2025, remembering the half rate in the first year, then apply the rule on disposal of assets not yet fully depreciated.
Show the solution
Charges deducted: 2023 at half rate, 18,000 × 10% = 1,800 euros; 2024 and 2025 at full rate, 3,600 euros each. Total deducted 1,800 + 3,600 + 3,600 = 9,000 euros. In 2026 the machine leaves the productive set-up, so the residual cost of 18,000 − 9,000 = 9,000 euros is deductible in full that year.
Answer: 9,000 euros in 2026
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