Rate of Depreciation of Graphic Arts Equipment

November 7, 1966 BIR RULING NO. 056-66 Mr. M. Gutierrez Tax Department Sycip, Gorres, Velayo & Co. 85 Ayala Avenue, Makati S i r : This refers to your letter dated September 14, 1965 regarding the rate of depreciation of graphic arts equipment, such as typesetting machines, off-set and letter-press printing machines, cutting machines and sundry equipment. cdll It is represented that these machines will be leased to printing and/or publishing establishments which will use them for 3-8 hour shifts a day. In reply thereto, I have the honor to inform you that depreciation being a question of fact and not merely a theory, this Office can not make a categorical ruling on the rate of depreciation of the aforecited machineries and equipments merely upon representation made by the taxpayer that the same will be used under abnormal condition. While a deduction may be taken for an amount which would adequately provide for extraordinary depreciation in addition to depreciation under normal condition of machineries and equipments which are put to excessive or continuous use, the taxpayer must however sustain his burden of proving the additional depreciation. It must be shown that the property has been subject to abnormal or excessive use and that such factors did materially reduce the useful life. (par. 23.38 Vol. 4, Law of Federal Income Taxation) In this Connection, it may be mentioned that under Bulletin "F" of the Federal government which this office had adopted in the determination of the depreciation rates of equipment, the average useful life given to printing and publishing machines vary from 15 to 17 years under normal working conditions. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue