BIR Ruling [DA-283-98]

June 29, 1998 BIR RULING [DA-283-98] Embassy of Switzerland Manila Gentlemen : This refers to your letter dated May 6, 1998 requesting for exemption from the payment of ad valorem and value added taxes (VAT) in the amounts of Two Hundred Six Thousand Nine Hundred Thirty-Six Pesos (P206,936.00) and Seventy-Nine Thousand Eight Hundred Eighteen Pesos (P79,818.00), respectively. cdti It is represented that the Embassy of Switzerland purchased one (1) unit motor vehicle, more particularly described as follows: Make and Model : Honda CRV Mini-SUV 5 door sedan, 2.Oli PGM-F1, 4-speed automatic transmission, 145 hp Model Year : 1998 Color : Heather Mist that said motor vehicle is being purchased for the personal use of Mr. Peter Casaulta, Counsellor and Deputy Head of Mission; and that in a letter dated April 28, 1998 (No. 981559), the Department of Foreign Affairs approved the said request for the tax-free purchase of a motor vehicle, 1998 Honda CRV Mini-SUV on the basis of reciprocity. In reply thereto, please be informed that under the principle of reciprocity, this Office may grant tax exemption to the Embassy of a Foreign State and their personnel on their local purchases of goods and services; provided that they can submit to the Commissioner of Internal Revenue or her 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) 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 approved the request for exemption from the payment of the ad valorem tax and VAT on the local purchase by that Embassy of one (1) unit 1998 Honda CRV Mini-SUV for the personal use of Mr. Peter Casaulta, the sale to said Mr. Peter Casaulta of the said vehicle shall be exempt from ad valorem tax and VAT imposed under Section 106 (A) of the Tax Code of 1997. (BIR Ruling No. DA-483-96 dated December 17, 1996) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. aisadc Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)