§ Mr. Adleyasked the Chancellor of the Exchequer if he will list, for all nine EEC countries, whether or not the structure of a hotel is allowable for tax purposes, as a charge against depreciation; and what is the rate in each country.
§ Mr. Denzil DaviesThe most recent information available is as follows:
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Whether structure of a hotel is allowable for tax purposes as a charge against depreciation Percentage rate of depreciation Per cent. Belgium Yes 3.0 (Note 2) Denmark Yes 1.0 (Note 3) France Yes 2.8 (Note 4) Germany Yes 2.0 (Note 5) Ireland Yes 10.0 (Note 6) Italy Yes 3.5 (Note 7) Luxembourg Yes 2.2 (Note 8) Netherlands Yes 5.0 (Note 9) United Kingdom No * — (Note 10) * Except so far as it relates to fire safety expenditure. Notes:
- 1. The straight-line method applies except where stated.
- 2. Belgium—The actual rate used is agreed in each case between the taxpayer and the tax authorities. The rate quoted is taken from the OECD publication " International Comparison of Depreciation Practices " (1975), as a representative rate for this class of building.
- 3. Denmark—An additional allowance of 3 per cent. annually is available for the first 10 years.
- 4. France—New hotel buildings may be depreciated at the rate of 7 per cent. using the declining-balance method.
- 5. Germany—Buildings completed after 31st December 1964 and before 9th May 1973 could be optionally depreciated at 3.5 per cent. for the first 12 years, 2 per cent. over the next 20 years and 1 per cent. over the next 18 years.
- 6. Ireland—There is an additional 10 per cent allowance for the first year.
- 7. Italy—Accelerated depreciation is available for new buildings over the first 4 years.
- 8. Luxembourg—Average rate.
- 9. Netherlands—Declining-balance method must be used.
- 10. In the United Kingdom expenditure on the structure of an existing hotel which is incurred to meet the requirement of a fire authority under the Fire Precautions Act 1971 normally qualifies for 100 per cent. first-year allowance.