What useful life should be considered when estimating the TAB factor of an intangible asset?

Amortisation of intangible assets is not always tax deductible. Its deductibility depends on the corporate income tax legislation of single countries. Most countries define maximum amortisation rates or minimum number of years in which the amortisation of intangible assets can be deducted, if at all. This page displays the legal tax amortisation periods of the main types of intangible assets.

Summary Table

CountryPatentsTechnologyTrademarkCustomer relationships GoodwillLast update
RussiaRUL (≥2)RUL (≥2)RUL or 10RUL or 105Apr 2016

Further Detail and Source Legislation

Tax amortisation of intangibles in Russia is explained in the Part 2 of the Tax Code of Russian Federation.[1]

Chapter 25 of Part VII is related to the Corporate profit taxation.

According to the Article 257.The valuation procedure for amortisable property, paragraph 3, the followings, in particular, can be considered as intangible assets:

  1. Patent for invention, industrial design, utility model;
  2. Patent or copyright to use computer programs, databases;
  3. Patent or copyright to use the topography of integrated circuits;
  4. Trademark, service mark, appellation of origin and brand name;
  5. Patent for selection achievements;
  6. "Know-how", secret formula or process, concerning industrial, commercial or scientific experience.
Article 258. then explains the distribution of intangible assets into Amortisation groups and subgroups.
  1. Amortised assets are distributed into amortisation subgroups according to the length of their useful life.
  2. For intangible assets referred to in points 1-3, 5, 6 of the list above, the taxpayer has a right to determine the useful life, which cannot be less than two years.
  3. For intangible assets for which it is impossible to determine the useful life, the amortisation period is set based on the useful life of 10 years (but not more than the remaining lifetime of the ongoing business).
As for the Goodwill, Article 268.1. (about recognition of revenues and expenses on the acquisition of an enterprise) says that, the difference between the purchase price and the value of the net assets is recognized as an expense (or an income) of the taxpayer.

The premium (or discount) paid by the buyer is taken into account for tax purposes in the following way:
  1. When positive (goodwill), it is amortised linearly in five years, commencing next month from the purchase date.
  2. When negative (badwill), is fully recognized as an income in the month of the purchase date.

  1. ^ Russian Tax Code Part II

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