Ministry of Finance - Tax Department - 2013 [Executive Rules & Instructions]
Executive Rule No. 30 Concerning depreciation of fixed assets
Article No. 4 of the Executive Regulations
First: Depreciation of fixed assets is allowed as per the straight-line method, which is included in the Incorporated Body's tax declaration regardless of what is reflected in the books of the Incorporated Body, provided that the depreciation rate does not exceed the rates stipulated in the bylaws, which are as follows:
| Asset type | Annual depreciation rate |
|---|---|
Buildings | 4% |
Prefabricated buildings | 15% |
Office furniture and tools | 15% |
Equipments and machineries | 20% |
Drilling equipments | 25% |
Electric and electronic devices | 15% |
Computers and accessories | 33.3% |
Software | 25% |
Vehicles | 20% |
Trucks and lorries | 15% |
Buses | 20% |
Second: The assets required to be depreciated should be owned by the incorporated body.
Third: The assets should be necessary for carrying on business or trade in the State of Kuwait.
Fourth: The depreciation charge should be determined based on the carrying cost of the asset from the date of use.
Fifth: The depreciation rates should be within the rates determined in paragraph (1) unless it is proven that the conditions of the asset utilization differ from the usual practice or custom with respect to the activity in which the asset is employed.
Sixth: Amortization of Incorporated Body goodwill and key money is disallowed.
Seventh: The taxpayer may request the Tax Department to calculate depreciation charge in any method other than the straight-line method, 90 days before the due date for filing the tax declaration. The Tax Department shall accept this request if it is based on reasonable grounds in accordance with Tax accounting rules and principles.
Eighth: In case the Tax Department accepts the request of the Incorporated Body to change the policy applied in calculating the fixed assets' depreciation, this shall only be applied on new assets, while old assets shall be depreciated according to the old policy applied before the change.
Ninth: Special and exceptional cases relating to the depreciation of fixed assets shall be treated separately after consulting the Tax Department in this regard.