Under Section 3 of RR 12-2012 mentioned the guidelines that shall be observed in determining whether depreciation expense can be claimed or not on account of Vehicles capitalized by the taxpayer, or in claiming other expenses and input taxes on account of said Vehicle with details as follows:
1. No deduction from gross income for depreciation shall be allowed unless the taxpayer substantiates the purchase with sufficient evidence, such as official receipts or other adequate records which contain the following, among others:
a. Specific Motor Vehicle Identification Number, Chassis Number, or Other registrable identification numbers of the Vehicle;
b. The total price of the specific Vehicle subject to depreciation; and
c. The direct connection or relation of the Vehicle to the development, management, operation, and/or conduct of the trade or business or profession of the taxpayer;
2. Only one Vehicle for land transport is allowed for the use of an official or employee, the value of which should not exceed Two Million Four Hundred Thousand Pesos (Php 2,400,000.00);
3. No depreciation shall be allowed for yachts, helicopters, airplanes and/or aircrafts, and land vehicles which exceed the above threshold amount, unless the taxpayer's main line of business is transport operations or lease of transportation equipment and the vehicles purchased are used in said operations;
4. All maintenance expenses on account of non-depreciable Vehicles for taxation purposes are disallowed in its entirety;
5. Th input taxes on the purchase of non-depreciable Vehicles and all input taxes on maintenance expenses incurred thereon are likewise disallowed for taxation purposes.
Reference: Revenue Regulation No. 12-2012
