BIR Ruling [DA-177-99]

March 23, 1999 BIR RULING [DA-177-99] British Embassy 17/F Locsin Building 6752 Ayala Avenue Makati City Attention: K Ingle Management Officer Gentlemen : This refers to your letter dated February 8, 1999 requesting in effect, for exemption from the payment of value-added tax (VAT) and ad valorem tax for the purchase by the Embassy of one (1) unit motor vehicle, more particularly described as follows: Make and Model Honda Civic Sedan Model Year 1999 Color Taffeta White Chassis Number PADEK1650XVI01557 Motor/Engine Number P6FD6P41549 In reply, 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 (i.e., 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 1999 Honda Civic Sedan 1.6 Vti A/T for the personal use of Mr. Ian Charles Sargeant, Second Secretary Immigration, British Embassy, the sale 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, respectively. (BIR Ruling No. DA-214-98 dated June 3, 1998) Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal Enforcement Group)