BIR Ruling [DA-330-99]

May 31, 1999 BIR RULING [DA-330-99] Canadian Embassy 11th Floor Allied Bank Building 6754 Ayala Avenue, Makati City Attention: Mr. Hubert A. Simard First Secretary (Development) Gentlemen : This refers to your letter dated February 22, 1999 requesting in effect, for exemption from the payment of the 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 : Isuzu Pick-Up Double Cab Model Year : 1999 Chassis Number : PABTFS55HDX200233 Motor/Engine Number : 569902 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. DTEIaC 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 Isuzu Pick-Up Double Cab 1999 Model for the official use of Socio Economic Development through Cooperatives in the Philippines (SEDCOP) under the Canadian International Development Agency (CIDA), Embassy of Canada, 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)