Tool

Tax depreciation calculator

Work out the annual and monthly deduction on a fixed-asset investment, using the maximum rates authorized by the Income Tax Law (LISR).

Annual deduction
Straight-line tax depreciation
Monthly deduction
Tax life of the asset
Applied rate

Assumptions & method

  • Maximum authorized rates from Arts. 34 and 35 of the LISR (Income Tax Law) (straight-line on the original amount of the investment): buildings 5%, furniture 10%, cars and trucks 25%, computer equipment 30%, general machinery 10%.
  • For cars, the deduction has a value cap (Art. 36-II LISR: $175,000 in general; higher for electric/hybrid vehicles): if the car costs more, the excess is not deductible.
  • The law also allows the deduction to be adjusted for inflation; here we show the base calculation without that adjustment.
  • Applies to companies and individuals with business activity; confirm your case with your accountant.
FAQ

The essentials, in short

What is tax depreciation?
Deducting an investment in parts over its useful life, instead of all in the year of purchase. The LISR sets the maximum annual percentage by type of asset; you may deduct less, but not more.
Can I deduct the IVA on the asset?
IVA is not depreciated: it is credited against the IVA you collect in the period of the purchase (if the asset is used for taxable activities). What is depreciated is the amount excluding IVA.
What happens if I sell the asset early?
In that fiscal year you deduct the portion still pending depreciation and recognize the income from the sale; the difference produces a taxable gain or loss. The date and invoice paperwork matters: document the disposal.
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