The Federal Government has sanctioned Law No. 14,871/2024, which authorises companies that opt for real profit to use accelerated depreciation for new machinery, equipment, apparatus and instruments destined for fixed assets.
The sectors benefiting from this depreciation rule will be listed in a Decree to be issued by the Executive Branch.
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Understanding depreciation
Depreciation is the loss in value of a fixed asset over time, due to wear and tear, natural causes or obsolescence. It is calculated as a monthly percentage based on the asset’s depreciable value.
As a rule, an asset is depreciated over 10 years, so depreciation occurs annually on 10 per cent of the asset’s value, which is equivalent to saying that the asset loses 10 per cent of its value per year of useful life.
There are differences between accounting depreciation, which depends on the useful life of the asset, and tax depreciation, which is regulated by law for the purposes of deducting companies’ Income Tax (IR) and Social Contribution on Net Profits (CSLL).
Requirements of Law 14.871/2024
The new law imposes certain requirements for the use of accelerated depreciation:
- New goods: only new machinery, equipment, appliances and instruments are included, excluding second-hand goods or vehicles.
- Beneficiary sectors: the goods must be destined for fixed assets and used in specific economic activities that will be defined by a regulatory decree.
- Acquisition period: the benefit applies to acquisitions between the date of publication of the regulatory decree and December 31, 2025.
Benefits of accelerated depreciation
Accelerated depreciation allows up to 50% of the value of new goods to be depreciated in the year they are installed, with the balance being able to be depreciated in subsequent years
This provides a larger and faster tax deduction, encouraging the renewal of the industrial park and, consequently, increasing the competitiveness of national industry
Application example
The tax benefit mentioned for a company that acquires a machine for R$10,000,000.00 on June 1, 2024, and installs it on August 1, 2024 will be projected as follows:
First year (2024)
Accelerated depreciation: 50% of the asset’s value (R$ 5,000,000.00)
Annual depreciation: R$ 5,000,000.00 (R$ 416,666.67 per month)
Depreciation deductible in Lalur: R$ 2,083,333.35 (from August to December)
Next year (2025)
Remaining balance: R$ 7,916,666.65
Normal depreciation deductible in Lalur: 10% per year on the remaining balance (R$ 791,666.67)
Accelerated depreciation deductible in Lalur (50% of the asset’s value): R$ 5.000.000,00
Total deductible depreciation in 2025: R$ 5,791,666.67
Limitations and restrictions
The law prohibits accelerated depreciation for buildings, constructions, forestry projects, land, works of art, antiques and assets subject to exhaustion quotas.
The total amount of accumulated depreciation cannot exceed the acquisition cost of the asset. Once the total cost of the asset has already been deducted in Lalur, the normal depreciation charges recorded in the bookkeeping must be added to the net profit for the purposes of determining the actual profit and, consequently, the IRPJ/CSLL to be paid.
Conclusion
Law No. 14.871/2024 offers a significant incentive for the renewal and modernization of fixed assets in Brazilian companies, especially in the industrial sector.
By allowing faster depreciation, the law aims to stimulate the economy and improve industrial productivity. Companies that use this benefit must strictly follow the regulations to ensure the correct application and use of the tax incentives.
