BIR Ruling [DA-013-99]

January 8, 1999 BIR RULING [DA-013-99] Embassy of France c/o 16/F Pacific Star Bldg. Sen. Gil Puyat Ave. corner Makati Avenue Makati City Gentlemen : This refers to your request, which was indorsed to this Office by the Department of Finance, for exemption from the payment of value-added tax (VAT) for the purchase by the Embassy of one (1) unit of motor vehicle, more particularly described as follows: cdll Make and Model : Honda CRV Year : 1998 Color : Royal Sapphire Chassis Number : PADRD-1720WV000595 Motor/Engine Number : PAWD2-P100586 In reply thereto, please be informed that under the principle of reciprocity, this Office may grant tax exemption to the Embassy of a Foreign State and its personnel on their local purchases of goods and, services; provided that they can submit to the Commissioner of Internal Revenue or his duly authorized representative a copy of the special legislation or international agreement showing that said foreign government allows similar tax exemption to the Philippine. Embassy or its personnel on their purchases of goods or services in that foreign country. [BIR Ruling No. 206-73 dated May 11, 1993] Thus, upon the certification by the Department of Foreign Affairs that indirect tax (e.g., value-added tax) exemption is granted to the Philippine Embassy and its personnel in a particular host country, the same privilege will also be accorded to the latter's Embassy and its personnel in the Philippines. Such being the case, since the Department of Foreign Affairs has recommended a favorable action on the basis of reciprocity to the request for exemption from the payment of the VAT and ad valorem tax on the local purchase by the Embassy of one (1) unit 1998 Honda CRV for the official use of First Secretary Cherif Castel, the purchase of said vehicle shall be exempt from VAT and ad valorem tax imposed under Sections 106 (A) and 149 of the Tax Code of 1997. (BIR Ruling No. DA-483-96 dated December 17, 1996) llcd Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)