BIR Ruling [DA-054-99]

February 4, 1999 BIR RULING [DA-054-99] French Embassy 16/F Pacific Star Building Sen. Gil Puyat Avenue cor. Makati Avenue, Makati City Attention: Jean Charles Demarquis Charged' Affaires Gentlemen : This refers to your letter dated December 16, 1998 by way of 2nd Indorsement from the Department of Finance dated January 4, 1999 requesting for exemption from the payment of Value-Added Tax (VAT) and Ad Valorem Tax for the purchase by the Embassy of one (1) unit of motor vehicle, more particularly described as follows: Make and Model: Toyota Model: Tamaraw FX Revo GLX Year Model: 1998 Color: Wine Red Chassis Number: KF80-8001845 Motor/Engine Number: 7K-0229681 In reply thereto, please be informed that under the principle of reciprocity, this Office may grant 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 and ad valorem 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 of 1998 Toyota Tamaraw FX Revo GLX, for its official use, the sale of said vehicle shall be exempt from VAT and ad valorem tax imposed under Section 106(A) and 149 of the Tax Code of 1997, respectively. (BIR Ruling No. DA-527-98 dated November 25, 1998) LibLex Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)