Legal Basis
Article 59 of the Regulations on the Implementation of the Enterprise Income Tax Law of the People's Republic of China*** and the State of China, depreciation of fixed assets calculated in accordance with the straight-line method is allowed to be deducted.
Enterprises shall calculate depreciation from the month following the month in which the fixed assets are put into use; for fixed assets that have ceased to be used, depreciation shall cease to be calculated from the month following the month in which they cease to be used.
Enterprises should be based on the nature and use of fixed assets, a reasonable determination of the estimated net residual value of fixed assets. Once determined, the estimated net residual value of fixed assets shall not be changed."