Decreasing depreciation: for which assets and with what effects?

Updated March 2026 - Degressive depreciation is a tax regime which allows you to accelerate the deduction of the value of a professional asset over the first years of its use. By applying a multiplier coefficient to the linear rate, the company records higher charges at the start of the asset's life, thus reducing its taxable income more quickly than with traditional linear depreciation.

Degressive depreciation is an accounting and tax calculation method provided for by the General Tax Code. Unlike the linear system which distributes the value of the good equally over its entire duration of use, the decreasing scale concentrates the deductions on the first years.

The mechanism is based on a multiplier coefficient set by the tax administration, which applies to the linear depreciation rate. This coefficient depends on the normal duration of use of the asset:

• 3 to 4 years duration of use: coefficient of 1.25
• 5 to 6 years duration of use: coefficient of 1.75
• More than 6 years of useful life: coefficient of 2.25

For example, an industrial good with a useful life of 10 years is subject to a linear rate of 10% (100/10). Multiplied by the coefficient 2.25, the decreasing rate reaches 22.5% in the first year. The company thus deducts €22,500 from a property acquired for €100,000 excluding tax, compared to only €10,000 on a straight-line basis.

To understand the basic mechanisms of depreciation, see our article on Depreciation Allowance.

Not all assets can be depreciated according to the declining balance system. Article 39 A of the General Tax Code provides an exhaustive list. Here are the main categories of goods concerned in 2026:

Capital goods and industrial equipment

• Industrial machines and production equipment
• Technical tools and specialized equipment
• Internal handling and transport equipment (forklifts, pallet trucks)

Office and IT equipment

• IT equipment (servers, computers, network equipment)
• Professional office furniture (in some cases)
• Telecommunication equipment

Specific real estate

• Goods for professional use whose duration of use does not exceed twenty years
• Layouts and installations of professional premises
• Certain hotel and tourist equipment

What is excluded from the degressive regime

• Passenger vehicles (private cars)
• Goods with a useful life of less than 3 years
• Residential buildings
• Elements of furniture not professionally affected in an exclusive manner

Hayot Expertise Advice: the eligibility of a property for the degressive regime cannot be assumed. Each acquisition must be analyzed with regard to its exact nature, its actual use in the company and its probable duration of use. A qualification error can result in a tax adjustment.

The calculation follows a two-step logic. During the first phase, the decreasing rate applies to the net book value of the property (original value less depreciation already noted). Then, from a certain year, you have to switch to linear mode.

The rule of the seesaw in linear damping

Every year, the company must compare two amounts:

1. The allocation calculated with the decreasing rate applied to the net book value 2. The linear endowment calculated on the basis of the number of years remaining (year of operation included)

It is the highest amount that is retained. In practice, this means that from a certain financial year, the linear regime becomes more advantageous and is automatically imposed.

Let's take a concrete example. In April 2026, a company acquires industrial equipment for €60,000 excluding tax. The duration of use is 8 years, which gives a coefficient of 2.25.

• Linear rate: 100 / 8 = 12.5%
• Decreasing rate: 12.5% × 2.25 = 28.125%

Year 1 (2026, pro rata 9 months): 60,000 × 28.125% × 9/12 = €12,656

Year 2 (2027): (60,000 - 12,656) × 28.125% = €13,315

Year 3 (2028): (47,344 - 13,315) × 28.125% = €9,571

From year 4, the remaining linear calculation (over 5 remaining years) becomes greater than the decreasing calculation. The company then switches to linear for the balance.

This obligation to switch to the most favorable regime is a specificity of the French degressive regime. It ensures that the company always benefits from the fastest possible deduction rate.

To learn more about the implications of these choices on your returns, consult our guide on the Tax package definition.

The distinction between these two regimes is fundamental for the tax management of the company:

The choice of regime is not fiscally neutral. The declining balance generates a cash flow advantage by deferring part of the tax to subsequent financial years. Over the entire lifespan of the asset, the total depreciated amount remains the same: it is the distribution over time that changes.

The main impact of decreasing depreciation is at the level of tax cash flow. By recording higher expenses in the first financial years, the company reduces its taxable income and therefore its corporate tax or its income tax.

The concrete advantages

• Immediate cash flow gain: less tax to pay during the first years
• Indirect financing of the investment: the tax savings contribute to the repayment of the possible loan
• Better alignment with economic reality: certain goods actually lose more value at the start of their life (computer hardware, technological equipment)

Limits and vigilance

• Later tax catch-up: lower allocations at the end of the period increase the taxable income of the last financial years
• Monitoring complexity: the annual calculation and the balance test require accounting rigor
• Control risk: the tax administration regularly checks compliance with the eligibility conditions and the coefficients applied

The choice between degressive and linear must be part of an overall reflection on the company's results trajectory. A company in the start-up phase, whose results are still fragile, will not necessarily have an interest in accelerating its deductions. Conversely, a profitable and stable company will derive maximum benefit from the degressive regime.

To better understand the relationship between depreciation choices and reference period, consult our article on Accounting year.

On the accounting level, the degressive regime is recorded according to the standards of the General Accounting Plan (PCG) published by the Accounting Standards Authority (ANC). The annual allocation is recorded by a regularization entry at the close of each financial year.

Typical accounting entry

**Debit:** 6811 - Depreciation charges on tangible assets
**Credit:** 281x - Depreciation of the asset concerned

Account 6811 comes into charge of the income statement, reducing the result for the year. Account 281x is a corrective asset account which reduces the gross value of the fixed asset on the balance sheet.

Mandatory mention in the tax return

The company must also report information relating to decreasing depreciation in the table of fixed assets and depreciation (table no. 2056-A of the tax package). This table details for each property:

• The original value
• The depreciation method chosen (linear or decreasing)
• The coefficient applies
• The allocations for the financial year and previous accumulations

Hayot Expertise advice: decreasing depreciation is a useful lever when it is chosen for the right assets. You should never apply it automatically without checking the eligibility and real interest in your exercises. A prior simulation compared to the linear regime is essential to measure the real cash flow gain.