Request of the Philippine Refugee Processing Center for Tax Exemption on Its Local Purchases

June 13, 1985 BIR RULING NO. 092-85 19-d 000-00 092-85 Gentlemen : Reference is made to your letter dated April 15, 1985 relative to the request of the Philippine Refugee Processing Center (PRPC) for tax exemption on its local purchases. It appears that pursuant to the Agreements entered into by and between the Government of the Republic of the Philippines and the United Nations High Commissioner for Refugees (UNHCR) in 1979, the PRPC was established in Morong, Bataan based on the principles and conditions contained in the statement of ASEAN Foreign Ministers issued in Bangkok on Feb. 21, 1979 with financial assistance being provided by the UNHCR; and that all funds for the operations including local purchases of the PRPC do not come from the Philippine Government but from the UNHCR. In reply, please be informed that as an International Refugee Organization, the UNHCR is one of the specialized agencies of the United Nations. Under Section 9(a), Article III of the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations, the UNHCR shall be exempt from internal revenue taxes for which it is directly liable . As such, the UNHCR-funded PRPC cannot claim exemption from the payment of the sales tax on its local purchases of articles or commodities because the same is a tax directly payable by the manufacturer thereof. Consequently, the fact that the tax may ultimately be shifted to or passed on to PRPC as part of the cost of the articles purchased will not constitute the same as a tax payable by UNHCR/PRPC for purposes of the exemption. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner