Non-exemption from Excise Taxes - UNCTAD V Conference Participants

April 27, 1979 BIR RULING NO. 022-79 Non-exemption from excise taxes UNCTAD V conference participants This refers to your letter dated December 1, 1978 requesting clarification on the following questions, in connection with the forthcoming UNCTAD V conference to be held in Manila on May 3 to June 7, 1979 and in the light of Batas Pambansa Blg. 2 repealing P.D. No. 31 and taking effect on April 1, 1979: "1. Can the Prime Minister waive the percentage tax? If so, in what way? (LOI, Proclamation Order or Executive Order). "2. Does the tax exemption granted to members of the United Nations extend to the delegates and secretariat of the UNCTAD?" cd In reply thereto, please be informed that although the Prime Minister can waive through decree the collection of the 10% percentage tax from proprietors, operators or keepers of hotels, motels, resthouses, pension houses, lodging houses and resorts prescribed by Section 205-A of the Tax Code, as inserted by Batas Pambansa Blg. 2, he has publicly made the commitment that he will not exercise legislative powers but will leave this to the Interim Batasang Pambansa, except in cases of emergency. You are also informed that representatives of member countries to the principal and subsidiary organs of the United Nations like the UNCTAD V and to conferences convened by the United Nations, while exercising their functions and during the journey to and from the place of meeting or conference, enjoy among others the following privileges and immunities: "xxx xxx xxx xxx xxx xxx "(g) Such other privileges, immunities and facilities not inconsistent with the foregoing as diplomatic envoys enjoy, except that they shall have no right to claim exemption from customs duties on goods imported (otherwise than as part of their personal baggage) or from excise duties or sales taxes." (Emphasis ours; Section 1 Article IV of the Convention on the Privileges and Immunities of the U.N., adopted by the General Assembly on February 13, 1946. "Representative" shall be deemed to include all delegation, deputy delegates, advisers, technical experts and secretaries of delegations. (Sec. 16, Ibid.) Under Article 34 of the Vienna Convention adopted on April 18, 1961 by the United Nations Conference on Diplomatic Intercourse and Immunities, diplomatic envoys are exempt from all dues and taxes, whether personal or real, national, regional or municipal, except the following: (a) indirect taxes normally incorporated in the price of goods or services; (b) dues and taxes on private immovable property situated in the territory of the receiving State, unless he holds it on behalf of the sending State for the purpose of the mission; (c) estate, succession or inheritance taxes levied by the receiving State; (d) dues and taxes on private income having its source in the receiving State and capital taxes on investments in commercial ventures in the receiving state; (e) charges levied for specific services rendered; and (f) registration, court or record fees, mortgage dues and stamp duty, with respect to immovable property. Moreover, officials of the United Nations shall: "(a) Be immune from legal process in respect of words spoken or written and all acts performed by them in their official capacity; "(b) Be exempt from taxation on the salaries and emoluments paid to them by the United Nations; "(c) Be immune from national service obligations; "(d) Be immune, together with their spouses and relatives dependent on them, from immigration restrictions and alien registration; "(e) Be accorded the same privileges in respect of exchange facilities as are accorded to the officials of comparable rank forming part of diplomatic missions to the Government concerned; "(f) Be given, together with their spouses and relatives dependent upon them, the same repatriation facilities in time of international crisis as diplomatic envoys; "(g) Have the right to import free of duty their furniture and effects at the time of first taking up their post in the country in question." (Section 18 Convention on the Privileges and Immunities of the United Nations) cdt It is clear from the aforequoted provisions that the tax exemptions of United Nations officials as well as the delegates and secretariat of the UNCTAD do not include among others, exemption from excise taxes such as the 10% hotel room occupancy tax. (Section 11(g), Convention Supra). Accordingly, no exemption from the payment of the said 10% tax can be extended to the delegates and secretariat of the UNCTAD. It may be stated in this connection, however, that in other countries (including richer developed states) where UNCTAD or UN agencies hold conferences, no legislation is usually enacted for the purpose of granting additional special tax exemptions to the participants.