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2026-09-07 | 0 comments
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Accelerated depreciation allows for the faster inclusion of the cost of individual fixed assets in tax expenses. In Ukraine, this right does not arise automatically upon purchasing a building: the property's class, date of commissioning, age, and actual use are important.
As of September 2026, the primary object for this regime is Group 3 real estate. Classification errors, leases, or missing documents may result in the deduction of tax expenses.
The Tax Code of Ukraine links accelerated depreciation not to property ownership, but to the group of fixed assets and the conditions of their use. For buildings and structures, the key clause is paragraph 43-1 of Subdivision 4 of Section XX of the Tax Code of Ukraine.
Group 3 includes buildings, structures, and transfer devices. Buildings include production facilities, workshops, warehouses, and other capital structures. Structures can be engineering and infrastructure facilities that have an independent purpose.
Transmission facilities include networks and facilities that transmit energy, heat, water, gas, or other resources. These can include pipelines, power lines, and utility networks. The group is determined by their technical function, not just by the contract name.
A building, ventilation system, transformer, elevator, or external network can be accounted for as separate inventory items. A separate useful life is established for each asset, and the corresponding tax group is selected.
For example, a capital building may belong to group 3, while the equipment installed within it belongs to group 4. Therefore, an accountant needs to review the technical data sheet, the project design, the acceptance certificate, and the inventory data.
Land itself is not depreciated like a building or structure. It is treated separately in the tax classification. Its value cannot be included in accelerated real estate depreciation along with the cost of the constructed property.
Capital expenditures on land improvements not related to construction also have a separate accounting group. Roads, fences, drainage systems, and other objects can be classified separately by their purpose. First, it is necessary to separate the value of the land, building, and improvements.
For tax purposes, the period depends on the type of property. The Tax Code establishes minimum terms, and the company specifies the chosen term in the order on accounting policies and facility commissioning documents.
For standard tax depreciation, the minimum term is 20 years for buildings, 15 years for structures, and 10 years for transmission devices. A shorter term cannot be established without special grounds.
The accounting term may differ from the tax term. However, when calculating income tax, the company takes into account the limitations of the Tax Code and applies tax adjustments if required.
For eligible Group 3 assets, a 10-year term may be used. This applies to the straight-line depreciation method when meeting the requirements of paragraph 43-1, subdivision 4, section XX of the Tax Code of Ukraine.
Reducing the depreciation period does not mean writing off the entire cost at the time of purchase.
For example, an asset worth UAH 10 million without residual value is depreciated at UAH 1 million per year over a 10-year period. With a standard depreciation period of 20 years, the annual amount would be UAH 500,000.
Depreciation begins after the asset is recognized as a fixed asset and is ready for use. In practice, this is associated with the commissioning certificate, the manager's order, and the asset's inclusion on the balance sheet.
Unfinished construction and capital investments are not depreciated until this point. If an asset is temporarily unused, it is necessary to check the reasons for the downtime, reconstruction, or conservation and their impact on depreciation calculation.
One belonging to a group of 3 weeks Residual. The taxpayer must simultaneously meet the requirements for newness, commissioning date, and economic use of the property.
The property must be new and previously unused. For the accelerated depreciation regime, expenses after January 1, 2020, and commissioning during the period established by the transitional provisions of the Tax Code of Ukraine (before December 31, 2030) are relevant.
Purchasing an old building, even after major renovations, generally does not entitle one to the accelerated regime. The status of a new property is confirmed by a contract, seller's deed, technical documentation, and operational history.
The property must be used by the enterprise itself in its economic activities. This confirmation includes a commissioning order, an inventory card, production documents, utility contracts, and accounting data.
The mere presence of the building on the balance sheet is not sufficient. It is necessary to demonstrate that the asset is related to income generation or supporting the company's operations.
Assets leased to another party generally do not qualify for accelerated depreciation. This applies to offices, warehouses, retail space, and production facilities.
An exception is provided for taxpayers whose primary activity is leasing property. If leasing premises is not their primary activity, the right to depreciation must be assessed especially carefully.
The Tax Code establishes restrictions for assets that have already been used, received free of charge, contributed to the authorized capital, or acquired from related parties. Therefore, the purchase and sale agreement should not be the only document for verification.
It is necessary to examine the seller, the history of the asset, previous commissioning certificates, and depreciation information. A transaction with a related party requires a separate analysis of the terms of paragraph 43-1 and related provisions of the Tax Code.
The accelerated regime primarily changes tax depreciation. Accounting continues to operate according to NBU or IFRS and the company's accounting policies.
An enterprise can accrue accounting depreciation, for example, over 20 years, and tax depreciation over 10 years. In the first years, tax expenses will be higher than accounting expenses.
This difference affects the calculation of deferred tax. Enterprises that apply NBU 17 or IFRS recognize the corresponding tax asset or liability.
Article 138 of the Tax Code requires adjusting the financial result for accounting depreciation and tax depreciation. This rule applies to taxpayers who are obligated to apply such adjustments.
Taxpayers with annual income of up to UAH 40 million may elect not to adjust the financial result if they meet the conditions of paragraph 134.1.1 of the Tax Code. In this case, accelerated tax calculation may not be applied separately from accounting.
The set of documents must show the entire asset's history: from acquisition or construction to the start of depreciation. It includes the contract, acceptance certificate, technical documentation, readiness certificate, commissioning order, and inventory card.
Also stored are the useful life order, accounting policy, and tax depreciation calculation. These documents are important when verifying the classification and accrual start date.
A special regime cannot be used simply because the property is classified as a building or structure. Tax risks arise if at least one mandatory condition is violated.
A previously used building does not become new after purchase or renovation. Repairs, modernization, and a change of ownership do not change the history of the property's use.
If a company is constructing a new facility on the site of an old one, new capital investments must be separated from the value of the previously used property. Documents must confirm that the new property was commissioned within the specified period.
Regular depreciation of rental property is permitted subject to general rules. However, the right to accelerated depreciation depends on the status of the enterprise and its primary activity.
A warehouse or office transferred to a tenant cannot be automatically included in the accelerated depreciation regime. The contract, accounting policy, and tax documents must agree on the same position.
Land is not depreciated under the rules of Group 3. Unfinished construction is also not depreciated until the property is completed and commissioned.
The cost of land, building, utilities, and amenities Structures must be reported separately. This helps avoid overstating accelerated depreciation.
An error in classifying a warehouse, network, or equipment into Group 3 may result in additional tax assessments. You cannot rely solely on the wording in the contract or title deed.
When reconstructing, mothballing, or leasing a property, the conditions of the regime must be re-checked. Changes in actual use affect the tax calculation.
It is best to conduct the check before the annual income tax calculation. It should cover the property, documents, dates, and method of use.
First, compare the technical purpose, inventory number, primary documents, and the Tax Code group. Then check the dates of expenses, construction completion, commissioning, balance sheet entry, and depreciation start.
After this, check whether the asset was in use, received free of charge, contributed to the authorized capital, or purchased from a related party. Separately review lease agreements and the actual use of the premises.
The final calculation should show the depreciation amount over 10 years, the difference from the accounting term, and the impact on income tax. Check the terms annually against the current version of Article 138 and the transitional provisions of Section XX of the Tax Code.
Accelerated depreciation in Ukraine is available primarily for new buildings, structures, and transmission devices of Group 3. For them, a reduced period of 10 years may be applied using the straight-line method.
The right depends on the date of commissioning, newness, proprietary business activity, and the absence of prohibited leases. Land, unfinished construction, and used assets require separate accounting.
Before submitting your reports, check the asset's classification, history, primary documents, and calculation under Article 138 of the Tax Code. Verify the final determination against the version of the legislation in effect on the date of depreciation accrual and filing of the return.
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