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Originally Posted by
Andromeda
You add depreciation back to profit and then deduct wear and tear, for tax purposes. (Depreciation is a disallowed expense.)
There are no choices - the tax authority determines the wear and tear allowance and then that is what you apply. In south Africa they are all expressed in years, therefore straight line, for entities that are not Small Business Corporations (SBC).
If the entity is a qualifying SBC, you may claim all qualifying plant and equipment acquired during the year, at once. In respect of other fixed assets, you may claim wear and tear 50% in year 1, 30% in year 2 and 20% in year 3.
In all cases, fixed assets up to R7,000 may be fully claimed in year 1. The R7,000 limit is reviewed every year.
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