Depreciation of fixed assets

The depreciation of fixed assets for tax purposes is a statutory requirement. In principle taxpayers are free to choose a depreciation method. The method chosen must be in accordance with sound business practice. The linear method of depreciation is generally used. A less common method of calculating depreciation is the declining balance method. In case law, the latter method is accepted only for fixed assets with a steadily declining use with age. A combination of both methods, i.e. depreciation according to a declining percentage, may also be used. Goodwill may only be depreciated if the goodwill has been purchased from a third party; goodwill generated by the company itself cannot be depreciated. An accelerated depreciation is permitted for certain fixed assets, of which the most important are: ? energy-saving fixed assets and other environmentally-friendly fixed assets; ? sea-going vessels; ? intangible assets, providing these belong to a business that has been purchased which was not established in the Netherlands. This is subject to restrictions.