Can the establishment fee be recorded as an expense?
Article 149- In determining the taxable income, the calculation of asset depreciation and establishment and capital costs is done in compliance with the following principles:
1. That part of a fixed asset whose value decreases due to use or passage of time or other factors regardless of price changes is depreciable.
2. The source of depreciation is the cost price of the asset.
3⃣ Depreciation is calculated from the date that the depreciable asset ready for use is provided to the institution. In the event that a depreciable asset is provided to the institution during the month, except for movies imported from abroad, which will be depreciable from the date of the first show, the said month will not be included in the calculation. In the case of factories, the trial operation period is not considered part of the operation.
4⃣ establishment costs, such as institution registration expenses, consulting fees, etc., and excess expenses on the income of the “pre-operation period and trial operation period” except in the cases specified in the table provided in Article 151 of this law, maximum up to A period of ten years from the date of operation can be amortized equally.
5⃣ If a loss occurs to the institution as a result of the sale of depreciable property or loss of profit of machinery, the loss equal to the undepreciated value of the asset minus the sale proceeds (in case of sale) can be included in the profit and loss account of the same year.
Note- Regarding the calculation of the tax of the producers of Iranian films that are produced in Iran, the cost price of the film in the first year of operation and if the film’s income does not increase in the following years, it will be included in the calculation of the taxable income.
Mehdi Koh Soltani (financial services, accounting, financial and tax consultant):
The group of accountants and auditors of Tabriz
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