BIR Ruling [DA-465-98]

October 28, 1998 BIR RULING [DA-465-98] Royal Netherlands Embassy 9th Floor Kings Court Bldg. 2129 Pasong Tamo Makati City Attention: J . F . van Vriesland Attache Gentlemen : This refers to your letter dated October 28, 1998 requesting, in effect, modification of BIR Ruling No. DA-463-98 dated October 26, 1998 to include exemption from the payment of Ad Valorem Tax for the purchase by the Embassy of one (1) unit motor vehicle, more particularly described as follows: Make and Model : Honda CRV 2.0 AT Model Year : 1998 Color : Heather Mist Chassis Number : PADRD 1830WV002893 Motor/Engine Number : PEWD7-P102932 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 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. 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 Honda CRV 2.0 AT 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-483-96 dated December 17, 1996) This modifies BIR Ruling No. DA-463-98 dated October 26, 1998. Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal & Enforcement Group)