BIR Ruling [DA-285-99]

May 13, 1999 BIR RULING [DA-285-99] Canadian Embassy 11/F Allied Bank Building 6754 Ayala Avenue, Makati City Attention: Mr . Hubert A . Simard First Secretary (Development) Gentlemen : This refers to your letter dated January 6, 1999 requesting for exemption from the payment of value-added tax (VAT) and ad valorem tax for the purchase by the Embassy of one (1) unit of motor vehicle, more particularly described as follows: Make and Model Isuzu Hi-Lander SLX Model Year 1998 Chassis Number PABTBR542W2008684 Motor/Engine Number XI4174 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 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 indirect tax (e.g., value-added tax, 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. LLpr 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 1998 Isuzu Hi-Lander SLX for its official use, 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-527-98 dated November 25, 1998) Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)