First, the reason:
Decoration fees are generally not included in the value of fixed assets, because the benefit period is different from the house.
If it happens at the time of purchase, it should be included in the cost of fixed assets. Because the renovation occurred at the time of purchase, it means that the house has not reached the predetermined usable state, and it can only be used after renovation.
Second, the legal basis:
Regulations of People's Republic of China (PRC) Municipality on the Implementation of Enterprise Income Tax Law
Article 69 provides that:
Only in line with "(a) repair expenditure reached more than 50% of the fixed assets tax basis; (2) Subsequent expenses for extending the service life of fixed assets for more than 2 years after repair.
As a long-term prepaid expense, it should be amortized in installments within the service life of fixed assets and deducted before tax, instead of amortized in five years.
Extended data:
I. Classification of decoration fees:
1, initial decoration fee for newly purchased (built) houses.
2, the old house renovation costs.
3. Decoration expenses incurred in renting the house.
Two. Scope of fixed assets:
Including houses, buildings, machinery, machinery, means of transport and other equipment, appliances and tools related to production and business activities.
References:
China Government Net-Regulations for the Implementation of the Enterprise Income Tax Law of People's Republic of China (PRC)