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Miraç Özdemir
Business Income Tax

Depreciation Calculator (Straight-Line and Declining Balance, Turkish VUK)

Calculates Turkish tax-law (VUK) straight-line or declining-balance depreciation from cost and useful life, giving the year's depreciation, accumulated depreciation and net book value.

Version 2

Things to keep in mind:

  • Pro rata depreciation applies to the straight-line method only; ask your accountant about the declining balance method and which assets fall within its scope (e.g. car rental businesses).
  • Revaluation, inflation adjustment and value increases/decreases are not modelled.
  • Passenger-car expense restrictions, leasing and other tax expense limits are not applied.
  • You choose the useful life from the official depreciation list for your asset type; verify it for your asset.
  • Declining balance is only available to balance-sheet-basis taxpayers; the tool does not check taxpayer status.

Calculator

Asset and method

TRY

Depreciable base (TRY), excluding VAT unless the VAT is non-deductible.

Useful life from the Turkish depreciation list (years). Normal rate = 1 / life. Example: 5 years for 20 %.

Depreciation method

Normal: equal amounts. Declining balance: twice the normal rate (max 50 %) applied to the remaining value; the last year writes off the remainder.

Which year of the depreciation period (1 = year of acquisition). Beyond the life the asset is fully written off.

With the straight-line method the first year is depreciated for this many months; the remainder is expensed in the year after the useful life ends. For passenger cars (VUK art. 320) enter the months from the month of capitalisation to year end; leave 12 for other assets.

After the first calculation, the result updates automatically when you change a value.

Result

Enter the values and press Calculate to see the result here.

About this tool

Depreciation expenses the cost of assets used in a business for more than a year over their useful life (Turkish Tax Procedure Law, VUK art. 313 ff.). This calculator applies two methods based on the useful life in the Ministry's depreciation list.

Normal (straight-line, VUK art. 315): rate = 1 / useful life; an equal share of cost each year. Rounding differences are closed in the last year.

Declining balance (VUK repeated art. 315): rate = twice the normal rate, capped at 50 %, applied each year to the remaining value (cost less prior depreciation). The period follows the normal rate and the last year writes off the remainder. Only taxpayers keeping books on a balance-sheet basis may choose it.

Pro rata depreciation (VUK art. 320): for passenger cars only the remaining months of the year of capitalisation are depreciated (e.g. 3/12 for a car bought in October); the amount not taken in the first year is expensed in the year after the useful life ends. With the straight-line method the tool takes the number of first-year months as an input. Example: a 1,200,000 TRY passenger car, 5 years, capitalised in October: year 1 60,000 TRY, years 2–5 240,000 TRY, year 6 the remaining 180,000 TRY.

Formulas (declining): r = min(2 / life; 0.5); net book value after year k = Cost × (1 − r)^k; annual depreciation = prior closing value − closing value; the last year's depreciation equals its opening value.

Example: 100,000, 5 years, declining balance: rate 40 %; year 1 40,000, year 2 24,000, year 3 14,400 (accumulated 78,400, net value 21,600), year 4 8,640, year 5 the remaining 12,960.

Extra example (straight-line): 250,000 TRY, 10-year life, straight-line: the rate is 10% and the annual depreciation 25,000.00 TRY. At the start of year 4 the net value is 175,000.00 TRY, accumulated depreciation is 100,000.00 TRY and the closing net book value is 150,000.00 TRY.

How to read the result: “Depreciation for the year” is the amount that can be expensed for the year you chose; “Accumulated depreciation” is the total taken up to the end of that year, and cost minus it is the closing net book value. A net book value of 0 means the asset is fully written off. Compare the results with your accountant's practice.

How to use

  1. Enter the cost of the asset.
  2. Enter its useful life in years from the depreciation list.
  3. Choose normal or declining balance.
  4. Enter the year you want (1 = year of acquisition).
  5. Press Calculate.

Notes

Amounts are rounded HALF_UP to 2 decimals. In the normal method the annual amount is the rounded cost / life and the last year closes the remainder. In declining balance the closing value is the rounded Cost × (1 − rate)^year. Years beyond the life show a fully written-off asset (annual amount 0). With pro rata depreciation the first-year amount is cost × months / (12 × life) rounded to the cent, intermediate years take the full annual amount and the remaining value is closed in the year after the useful life; pro rata applies to the straight-line method only.

Sources

References

  1. [1]
    Tax Procedure Law No. 213 (Turkey), Articles 313-321Official Gazette / mevzuat.gov.tr

Frequently asked questions

5 questions

  1. Straight-line takes an equal amount each year; declining balance takes more in early years and less later, while the total still equals cost.

Next step

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