BIR Ruling [DA-201-99]

March 30, 1999 BIR RULING [DA-201-99] The Embassy of Portugal 14D Trafalgar Plaza, Dela Costa Street Salcedo Village, Makati City Attention: Joao Brito Camara Ambassador Gentlemen : This refers to your letter dated January 22, 1999 (Note No. 36130 dated December 11, 1998) through the Department of Foreign Affairs, requesting for exemption from the payment of Value-Added Tax on your purchase of goods and services. In reply, please be informed that pursuant to Article 34 of the Vienna Convention on Diplomatic Relations, pertinent portion of 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 "xxx xxx xxx" the tax exemption privilege of an Embassy and its diplomatic agents does not include exemption from value-added tax (VAT) on its local purchases of goods and services. In other words, purchases by that Embassy of goods and/or services shall be subject to the value-added tax prescribed under Sections 106(A) and 108(A) of the Tax Code of 1997. However, under the principle of reciprocity, this Office may grant exemption to the Embassy of Portugal or its personnel on their local purchases of goods and/or services it appearing from the list submitted to this Office by the Department of Foreign Affairs that your Government allows similar tax exemption to Filipino Embassy personnel on their purchase of goods and services in your territory. LLphil Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)