BIR Ruling

April 17, 1968 The President Diplomat Sales, Inc. P. O. Box No. 475 Makati, Rizal S i r : This refers to your letter dated December 1, 1967 requesting that your firm be granted authority to make importations of watches, ladies handbags, perfumes, fountain pens, and other cosmetic materials in line with the authority granted to you to sell tax-free liquors and cigarettes to foreign embassies, consulates and other tax-exempt entities. In reply, I have the honor to quote hereunder the 2nd Indorsement dated December 5, 1967 of the Honorable, the Secretary of Finance relative to your aforecited request, viz: "Respectfully returned to the Commissioner of Internal Revenue, Manila, the within letter of Diplomat Sales, Inc. dated December 1, 1967, requesting authority to import, tax-free, watches, ladies' handbags, perfumes, fountain pens and other cosmetic materials for sale to foreign embassies, consulates and other tax-exempt entities, with the information that the authority previously given by this Department to the aforesaid firm to import, tax-free, cigarettes and liquors for sale to personnel of foreign embassies and consulates and other tax-exempt agencies in the Philippines is in line with Article 36(b) of the VIENA CONVENTION ON DIPLOMATIC RELATIONS, of which the Republic of the Philippines, is a signatory. Under the aforesaid convention, "articles for the personal use of a diplomatic agent or members of his family forming part of his household, including articles intended for his establishment, are exempt from customs duties, taxes and other related charges, other than charges for storage, cartage and similar services." However, the articles referred to therein are necessary and not luxury items such as those proposed to be imported tax-free by the aforesaid firm. "In view thereof, this Department regrets that it can not given favorable consideration to the present request." Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue