QuestionsQuestions (BOC CUSTOMS ADMINISTRATIVE ORDER NO. 5-2011)
It is issued pursuant to Section 608 of the Tariff and Customs Code of the Philippines (TCCP), as amended, in relation to Section 149 of the Tax Code of 1997 as amended by Republic Act No. 9224, and a DOF Joint Order on the disposition of tax-exempt vehicles owned/registered by diplomatic missions and consular offices.
The depreciation rate follows a schedule: current year = no depreciation; one-year old = 10%; two-year old = 20%; three-year old = 30%; four-year old = 40%; five-year old and older = 50%. Computation uses the straight-line method at 10% annually, but the rate may not exceed 50%.
Using the straight-line method at an annual rate of 10%, but in no case shall the rate exceed 50% (maximum depreciation indicated in the schedule).
Fifty percent (50%).
Twenty percent (20%).
The rate of depreciation depends on the tax/customs purpose: (a) for computing duties where certain valuation methods are used (Methods 2, 3 and 6), a straight-line 10% per year not exceeding 90%; (b) for computing ad valorem tax based on depreciated value at time of sale/transfer, 10% per year with total depreciation not exceeding 50% of the original cost/value.
Depreciation is computed using the straight-line method at 10% for every year, but not exceeding 90%.
Total depreciation must not be more than fifty percent (50%) of the original cost or value.
Straight-line depreciation at 10% per year, but in no case shall it exceed 90%.
Because the Order sets distinct rules depending on the tax/customs purpose and vehicle category: no-dollar importations and ad valorem tax for diplomatic transfers cap at 50%, while duties computation (using specified valuation methods) and trucks/heavy equipment can go up to 90%.
It specifies that depreciation computation follows the straight-line method at an annual rate of 10% (subject to the applicable maximum cap such as 50% or 90%).
Use 10% per year, but ensure the total amount of depreciation does not exceed 50% of the original cost/value.
It takes effect fifteen (15) days after its publication in newspapers of general circulation.
A copy must be filed with the Office of the National Administrative Register, UP Law Center.
It was adopted on 04 May 2011 and signed by Commissioner Angelito A. Alvarez (BOC).
It was approved by the Secretary of Finance, Cesar V. Purisima (signature shown in the text); the approval signature appears alongside the order without a separate listed date other than the adopted date.
Apply the schedule maximum: 50% depreciation. The straight-line computation at 10% annually applies, but cannot exceed 50% for this scenario.