Guidance on the handling and dismantlement of fixed assets at the old site, installed at the new site and the explanation and addition of documents
On July 27, 2020, the Tax Department of Long An province issued Official Letter No. 2091/CT-TTHT guiding the depreciation of fixed assets relocated from the old location and installed at the new location as follows:
In case the Company relocates all fixed assets at the old location to the new location to continue to serve production and business activities. Should the Company monitored and depreciated these fixed assets according to regulations, the Company may continue to depreciate for the remaining period according to the accounting books (if there is still time of depreciation).
In the process of relocation and installation of fixed assets, should there be expenses incurred for upgrading fixed assets or dismantling one or a number of parts of fixed assets but these parts are managed by standard of a tangible fixed asset, the Company have to make a record specifying grounds for change and re-determine indicators of primary price, the Residual value in accounting book, accumulated depreciation, utilization time of fixed assets and conduct the record according to regulations at Clause 4, Article 4 of Circular No. 45/2013 / TT-BTC dated April 25, 2013 of the Ministry of Finance.
Expenses for dismantlement and transportation of fixed assets shall be included in deductible expenses when determining taxable income if they meet the conditions specified in Article 4 of Circular No. 96/2015 / TT-BTC.