Regulations on the Useful Life of Mining Equipment
Regulations on the useful life of mining equipment are primarily determined by the relevant provisions of the “Implementation Regulations of the Enterprise Income Tax Law of the People’s Republic of China.” Specifically:
1. Explicit Depreciation Periods for Mining Equipment:
According to Article 60 of the “Implementation Regulations of the Enterprise Income Tax Law of the People’s Republic of China,” unless otherwise prescribed by the financial and tax authorities of the State Council, the minimum depreciation period for fixed assets, including aircraft, trains, ships, machinery, and other production equipment, is 10 years. As a type of production equipment, mining equipment generally follows this depreciation period, which is 10 years.
2. Depreciation Calculation Method and Starting Time:
Depreciation of fixed assets calculated using the straight-line method is deductible. Enterprises should calculate depreciation starting from the month following the month in which the fixed asset is placed in service; for fixed assets that cease to be used, depreciation should cease from the month following the month in which they cease to be used. This means that depreciation of mining equipment begins from the month following the month in which it is placed in service and continues until the end of its useful life or when it ceases to be used.
3. Requirements for Fixed Asset Depreciation:
Enterprises should reasonably determine the estimated net residual value of fixed assets based on the nature and usage of the fixed assets. Once determined, the estimated net residual value of fixed assets cannot be changed. This requirement also applies to mining equipment. When determining the depreciation period and depreciation method, enterprises should fully consider the nature, usage, and estimated net residual value of the equipment.
In summary, the useful life (depreciation period) of mining equipment is generally 10 years, as clearly stipulated in Article 60 of the “Regulations for the Implementation of the Enterprise Income Tax Law of the People’s Republic of China.” When depreciating mining equipment, enterprises should strictly adhere to this regulation and reasonably determine the estimated net residual value of the equipment to ensure accurate and compliant depreciation.
