Taxability of Local Purchase of Goods and Services by the Embassy of Romania

August 18, 1995 BIR RULING NO. 121-95 99 206-93; 318-93 121-95 Embassy of Romania 1216 Acacia Road Dasmarias Village Makati City, Metro Manila Attention: Mr . George Balasa Charge d'Affaires a . i . Gentlemen : This refers to your Note No. 460 requesting information as to whether that Embassy or its personnel in Manila can be granted VAT refund/exemption on its local purchase of goods and services enumerated therein for the official use of the foreign missions and staff. LexLib In reply, please be informed that under Article 34 of the Vienna Convention on Diplomatic Relations adopted on April 18, 1961, diplomatic agents shall be exempt form all dues and taxes, personal or real, national, regional or municipal, except : (a) indirect taxes of a kind which are 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 on inheritance duties levied by the receiving State, subject to the provisions of paragraph 4 of Article 39; (d) dues and taxes on private income having its source in the receiving State and capital taxes on investments made in commercial undertakings 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, subject to the provision of Article 23. It is clear from the foregoing that the tax exemptions of diplomatic agents/representatives do not include exemption from indirect taxes of a kind which are normally incorporated in their purchases of goods services, e.g., VAT on their local purchase of goods and services. Such being, the case, your request for VAT refund/exemption cannot be given due course. However, under the principle of reciprocity, this Office may consider granting tax exemption on your local purchases of goods services provided that you can submit to the Commissioner of Internal Revenue or her duly authorized representative a copy of the special legislation or international agreement showing that your Government allows similar tax exemption to Filipino Embassy personnel on their purchases of goods and services in your territory. aisadc Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue