The Commissioner's Table of Depreciation Rates
Article on the Commissioner's Table of Depreciation Rates which list the general economic depreciation rates and provisional depreciation rates set by the CIR.
The Commissioner's Table of Depreciation Rates lists the general economic depreciation rates and provisional depreciation rates set by the Commissioner.
The Commissioner sets economic rates (commonly referred to as "general economic rates" because they apply to many taxpayers) in determinations pursuant to section 91AAF of the Tax Administration Act 1994. The Commissioner also sets provisional rates in determinations pursuant to section91AAG of the Tax Administration Act 1994.
The Commissioner sets provisional rates for items of depreciable property where less information is available about that particular kind of item than is required to set reliably a general economic rate, such as where the item is new technology or new to New Zealand. After a period, the Commissioner reviews the provisional rate and often replaces it with a general economic rate.
Notifications of draft determinations for general economic rates are published for public consultation in the Tax Information Bulletin and the draft determinations are available here on the Inland Revenue website.
When determinations are finalised, they are published in the Tax Information Bulletin and on the Inland Revenue website.
General economic rates and provisional rates are also listed in various publications, including the Inland Revenue's General Depreciation Rates (IR265) from the Inland Revenue website and in the Depreciation Rate Finder on the Inland Revenue website.
"Determination DEP1: Tax Depreciation Rates General Determination Number 1" ("DEP1") was the first depreciation rate determination the Commissioner issued. DEP1 was issued on 5 April 1993 and published in the Appendices to Tax Information Bulletin Vol 4, No 9 (April 1993). DEP1 lists kinds of items with their corresponding general economic rates set by the Commissioner. Since DEP1 was issued, the Commissioner has set additional general economic rates and provisional rates for other kinds of items in subsequent determinations.
The Commissioner's Table of Depreciation Rates has been referred to as "DEP1", and determinations issued after DEP1 have referred to "amending DEP1" by adding further items and rates. However, more correctly in terms of the legislation, the Commissioner"s Table of Depreciation Rates includes not only DEP1, but other subsequent determinations that set general economic rates or provisional rates. Therefore, depreciation rate determinations now state that the Commissioner is "setting rates" rather than "amending DEP1". Consequently the Commissioner's Table of Depreciation Rates is no longer referred to as "DEP1" and is now referred to as the "Commissioner's Table of Depreciation Rates". This change does not affect the application of any depreciation rates to items of depreciable property.
For more information on depreciation, see the Inland Revenue's Depreciation - A Guide for Businesses (IR260).