BIR Ruling [DA-150-97]

April 8, 1997 BIR RULING [DA-150-97] Embassy of the Russian Federation Dasmarias Village, Makati City Philippines Attention: Hon . Anatoli I . Khmelnitski Ambassador Gentlemen : This refers to your note verbale to the Department of Foreign Affairs dated March 4, 1997 which was referred to this Office reiterating your request for exemption from value-added tax (VAT) on your purchases of goods and services in the Philippines. In reply, please be informed that pursuant to Article 34 of the Vienna Convention on Diplomatic Relations, pertinent portions of which read: "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 kind which are normally incorporated in the price of goods and services; xxx xxx xxx your tax exemption privilege does not include value added tax (VAT) on purchases of goods and services. However, considering the representations in your note verbale that you are extending the privilege of VAT exemption to the purchases of goods and services by the Philippine Embassy and its authorized personnel in your country, and considering further that the Department of Foreign Affairs has recommended the grant of similar treatment on the basis of reciprocity, we hereby confirmed that purchases of goods and services by that Embassy and its authorized personnel in the Philippines shall be exempt from VAT. In other words, all billings on your local purchases of goods and services shall exclude VAT. (BIR Ruling No. 030-96 dated February 27, 1996; BIR Ruling No. 160-95 dated October 17, 1995) Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service) By: ALICIA L. TOMACRUZ Head Revenue Executive Assistant (Legal Service)