Embassy of Vietnam Exempt from CGT and DST on Exchange of Property

October 6, 1999 BIR RULING NO. 154-99 000-00-154-99 Embassy of the Socialist Republic of Vietnam 554 Pablo Ocampo Street Malate, Manila Attention: Ambassador Nguyen Thac Dinh Gentlemen : This refers to your letter dated September 28, 1999 requesting for a confirmation of your opinion that your Government is exempt from the payment of any/all registration, and other fees in accordance with the provisions of the Vienna Convention on Diplomatic Relations. Documents show that the Pioneer Holdings, Equities, Inc. (PHEI), a corporation duly organized and existing under and by virtue of the laws of the Philippines with principal address at Fairlane St., Kapitolyo, Pasig City is the owner of a parcel of land situated at No. 670 Vito Cruz, Malate, Manila with an area of 1,636.40 square meters covered by Transfer Certificate of Title No. 242866 of the Registry of Deeds of Manila; that the Embassy is the owner of a parcel of land together with the improvement constructed thereon situated at No. 554 Vito Cruz, Malate, Manila with an area of 1,190.60 square meters covered by TCT No. 110905 of the Registry of Deeds of Manila; and that on September 18, 1999, the Embassy represented by Ambassador Nguyen Thac Dinh and Pioneer Holdings, Equities, Inc. represented by Victor Yu entered into a contract of Deed of Exchange whereby the PHEI exchanged a portion of that property covered by TCT No. 242866 (now TCT No. 243887), more particularly, Lot 1-A-4-I-2, containing an area of 1,243.03 square meters with that parcel of land together with the improvement constructed thereon covered by TCT No. 110905. LibLex In reply, please be informed that Article 23, paragraph 1 of the Vienna Convention on Diplomatic Relations adopted on April 18, 1961 states: "Article 23 "1. The sending State and the Head of the mission shall be exempt from all national, regional or municipal dues and taxes in respect of the premises of the mission, whether owned or leased, other than such as represent payment for specific services rendered. "2. The exemption from taxation referred to in this Article shall not apply to such dues and taxes payable under the law of the receiving State by persons contracting with the sending State or the head of the mission." It is clear from the foregoing that the Embassy of the Socialist Republic of Vietnam is exempt from the capital gains on the exchange of its property situated at Vito Cruz, Malate, Manila. Moreover, the Embassy shall be exempt from the documentary stamp tax imposed under Section 196 of the Tax Code of 1997. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue