BIR Ruling [DA-081-02]

April 30, 2002 BIR RULING [DA-081-02] Article 34, Vienna Convention Embassy of the United States of America Manila, Philippines Attention: Gregory Stanford Administrative Attach and Supervisory General Services Officer Gentlemen : This has reference to your letter dated February 20, 2002 requesting for a ruling for the exemption from premium taxes of employee health and life insurance policies contracted with local insurance companies. It is represented that as an employer, the American Embassy (Embassy) is mandated by US and Philippine regulations to provide its personnel certain employment benefits, such as health and life insurance, as part of its official duty to maintain operations in the country. It is your position that as international reciprocity law provides the Embassy exemption from taxes imposed on goods and services purchased for the official use of the Mission, the Embassy's acquisition of health and life insurance for its employees would merit similar exemption. In reply, please be informed that pursuant to Article 34 of the Vienna Convention on Diplomatic Relations which reads: "Article 34 "A diplomatic agent shall be exempt from all dues and taxes, personal or real, national, regional or municipal, except: "(a) indirect taxes of a kind which are normally incorporated in the price of the goods and services; "(b) dues and taxes on private immovable property situated in the territory of the receiving State, unless he holds it on behalf of the sending State for the purposes of the mission; "(c) estate, succession or inheritance duties levied by the receiving State, subject to the provisions of paragraph 4 of Article 39; "(d) dues and taxes on private income having its source in the receiving State and capital taxes on investments made in commercial undertakings in the receiving State "(e) charges levied for specific services rendered; "(f) registration, court or record fees, mortgage dues and stamp duty, with respect to immovable property, subject to the provisions of Article 23 the Embassy and its mission shall in general, be exempt from all dues and taxes, personal or real, national, regional or municipal, subject to the exceptions specified above. Thus, the American Embassy shall be exempt from premium taxes arising from its acquisition of health and life insurance policies for its employees. Very truly yours, Commissioner of Internal Revenue By: (SGD.) EDMUNDO P. GUEVARA Deputy Commissioner Legal and Inspection Group