Disallowed Depreciation & Input Tax, FBT Magnet
Emelino T Maestro, Father of Tax Accounting, Tax Guru
According to the BIR Commissioner, if you would purchase a 2.4 million-peso vehicle which is not to be used for the delivery of goods but for the use of a certain personnel, even if you would charge portion of its wear and tear, knowingly called 'depreciation' to your taxable income, it shall not be allowed. This means that you shall have an income tax disadvantage of 720,000 pesos for the duration of the useful life of the said vehicle. Or, in other language, your income tax payments is more than 720,000 pesos than the usual. Furthermore, if you paid 12% VAT for the said vehicle which is more or less 288,000 pesos, this input VAT shall not be allowed as a deduction from your output tax which means that you would shell out an additional amount similar to the VAT attributable to the purchase of the said vehicle. Finally, if you would allow your employee to use the said vehicle for his/her personal use, you are deemed to pay fringe benefit tax.
If you want to know how to get around with these stringent rules, please buy any book of ETM and he would email to you the ways to get around with the same.. Only the buying that is done within November 16 - 30, 2013 (8a - 6p) shall be entitled to receive the answer/solution.
For details, please coordinate with Len
email … jocelyn@maestrotaxation.org
mobile … 0922 862 0922
phone … 02 439 3918
office … Unit 419, Corporate 101, Mother Ignacia, QC
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