Komponentní odpisování ve vztahu k základu daně z příjmů právnických osob

Component depreciation in relation to the corporate income tax base 

Component depreciation is a specific accounting method according to which significant parts of asset with different useful lives (components) can be depreciated separately from the rest of the asset. The taxpayer is obliged to specify the type of asset for which the component depreciation method is used, the period of use and the method of the component’s identification, including its valuation. A component may be, for example, an elevator, a motor in a production line, or a refrigeration system in a freezer.

The Income Tax Act does not allow the use of the component depreciation method and even explicitly stipulates the obligation to eliminate the impact of this method on the tax base. The replacement of one component with another with the same parameters is considered a repair and the related costs are tax deductible in the year of the replacement. However, if the new component has different parameters, it may be a technical improvement which must be capitalised in the value of the asset. When disposing of an component with the accounting residual value, a distinction should be made as to whether the component was a repair or a technical improvement of the asset in the year of replacement. If the replacement of the component corresponded to a repair, the disposal of the accounting residual value cannot be claimed as a tax deductible expense. A different tax treatment may apply to the disposal of a component after technical improvement. The conditions for tax deductibility should be assessed individually.

If you have any questions, please contact the authors of the article or the EY advisory team you are working with.

Authors:

Ladislava Zamazalová

Ivan Zhurkin