Depreciating Fixed Assets in Bolivia: A Year-End Guide for SMEs

When a business buys a vehicle, a machine or a computer, the full price is not a cost in the year of purchase. The cost is spread over the asset’s useful life through depreciation. For tax purposes in Bolivia, the SIN publishes annual depreciation percentages by type of asset, and the amount you record each year is a deductible expense when it is properly supported. Many SMEs forget it, and pay more income tax than they have to.

1. The common annual rates

The SIN’s regulations set maximum annual rates by asset class. These are the ones most SMEs use:

Rates for other assets, such as agricultural machinery, vessels or specialized equipment, are set separately. Confirm the rate for each asset with your accountant instead of copying a table from the internet, including this one.

2. A simple example

That Bs 46,000 appears as an expense in your income statement even though no cash left the business this year. It reduces your taxable profit, which is why recording it is worth the effort. At the 25% rate for corporate income tax (IUE), Bs 46,000 of deductible expense can reduce the tax due by up to Bs 11,500, subject to your profit and your regime. See our guide to reading your financial statements to see where it shows up.

3. What you need before you can deduct it

• A valid purchase invoice in the company’s name and NIT. Without it, the asset can be hard to support as a deductible cost, and you may also have lost the IVA as crédito fiscal.
• A fixed asset register. A list with a description, purchase date, cost, rate and accumulated depreciation for every asset.
• The asset must be used in the business. A car used mostly for personal trips is a problem waiting for a review.
• Consistent method year after year. Do not switch methods or rates to suit one year’s profit.

4. UFV restatement

Bolivian accounting standards require non-monetary items such as fixed assets to be restated for inflation using the UFV. In practice, your accountant restates the cost of the assets and the accumulated depreciation at close, and depreciation is calculated on the restated value. If your bookkeeping stops at the original purchase price, your depreciation and your balance sheet can both be off. Ask how your books handle this.

5. Year-end depreciation checklist

This article is general information for Bolivian businesses, not tax, legal or financial advice. Rates, useful lives, restatement rules and what qualifies as a deductible expense depend on the asset, your regime and the current regulations, and the examples are simplified. Confirm how the rules apply to your business with your accountant or the SIN before acting.