Tax Exemption of the Proceeds of a Concert Sponsored by a Non-stock Non-profit Organization

September 3, 1992 BIR RULING NO. 246-92 99; 149 1-88; 25-88 133-90 246-92 Embassy of France Salustiana Dee Tower Makati, Metro Manila Gentlemen : This refers to your Note Verbale No. 119 which was referred to this Office by the Department of Finance, relative to your request for exemption from the payment of ad valorem and value-added taxes on your local purchase of a Nissan 1600 Super Saloon from Mantrade Company for the use of that Embassy. In reply, I have the honor to inform you that under Article 34 of the Vienna Convention on Diplomatic Relations adopted on April 18, 1961, diplomatic agents shall be exempt from 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 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; (f) registration, court or record fees, mortgage dues and stamp duty, with respect to immovable property, subject to the provisions 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 and services, e.g., ad valorem tax and VAT. Such being the case, that Embassy is not exempt from the ad valorem and value-added taxes on its local purchase of a Nissan 1600 Super Saloon from Mantrade Company. However, under the principles of reciprocity this Office may grant tax exemption to the Embassy or its personnel on their local purchases of goods and services, provided that you can submit to the Commissioner of Internal Revenue or his 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. llcd Very truly yours, JOSE U. ONG Commissioner of Internal Revenue