BIR Ruling [DA-373-98]

August 17, 1998 BIR RULING [DA-373-98] Embassy of France c/o 16/F Pacific Star Bldg. Sen. Gil Puyat Ave. corner Makati Avenue Makati City Gentlemen : This refers to your letter dated June 24, 1998 requesting for exemption from the payment of value-added tax (VAT) for the purchase by the Embassy of one (1) unit of motor vehicle, more particularly described as follows: aisadc Make and Model : Mitsubishi Model : L300 Exceed Van Year : 1998 Color : Symphonic Silver Chassis Number : JMYSNP03WWA000387 Motor/Engine Number : 4G63-UL4357 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 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 recommended a favorable action on the basis of reciprocity to the request for exemption from the payment of the VAT on the local purchase by the Embassy of one (1) unit 1998 L300 Exceed Van for its official use, the sale of said vehicle shall be exempt from VAT imposed under Section 106 (A) of the Tax Code of 1997. (BIR Ruling No. DA-483-96 dated December 17, 1996) cdt Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)