Embassy of the Kingdom of Morocco

March 10, 2020 DA ITAD BIR RULING NO. 008-20 Principle of Reciprocity; BIR Ruling No. ITAD-117-12 Embassy of the Kingdom of Morocco No. 6766, 21st Floor, Tower II The Enterprise Center, Ayala Avenue 1226 Makati City Gentlemen : This has reference to your Note No. 75/2020 dated January 28, 2020 referred to this Office by the Department of Finance and the Department of Foreign Affairs, requesting for exemption from the payment of value-added (VAT) and ad valorem taxes on the local purchase of a motor vehicle for personal use of __________________, Ambassador Extraordinary and Plenipotentiary of the Embassy of the Kingdom of Morocco, specifically described as follows: Type of Use: Personal Make: Harley-Davidson FLFBS Fatboy 114 Model Year: 2020 Color: River Rock Gray/Vivid Black Frame Number: MLY1YGK01LS039897 Engine Number: YGKL039897 In reply, please be informed that Article 34 of the Vienna Convention on Diplomatic Relations reads: " ARTICLE 34 A diplomatic agent 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 the goods and services; xxx xxx xxx" Thus, the tax exemption privilege of an Embassy and its diplomatic agents does not include exemption from VAT on its local purchases of goods and services. In other words, purchases by that Embassy of goods and/or services shall, in general, be subject to the VAT prescribed under Sections 106 and 108 of the National Internal Revenue Code of 1997, as amended. However, applying the principle of reciprocity, this Office may confirm exemption of the Embassy of the Kingdom of Morocco and/or its personnel on their local purchase of motor vehicles. To date, while the Philippines has no diplomatic post in Morocco, there is the Philippine Embassy in Libya which has concurrent jurisdiction over Morocco. And, the Embassy of the State of Libya is included in the updated list of diplomatic missions entitled to VAT exemption in the Philippines as confirmed from the list submitted by the DFA dated February 6, 2020 that the Government of the State of Libya allows similar exemption to the Philippine Embassy and/or its personnel on their purchase of motor vehicles in Libya. CScTED In view thereof, the local purchase of one (1) unit of 2020 Harley-Davidson FLFBS Fatboy 114 for the personal use of _______________________ of the Embassy of the Kingdom of Morocco, being an exempt individual from VAT, shall be subject to VAT at zero-percent (0%) rate pursuant to Section 106 (A) (2) (c) of the NIRC of 1997 as amended. (BIR Ruling No. ITAD-117-12 dated March 12, 2012) This ruling is issued on the basis of the facts as represented. However, if upon investigation it shall be disclosed that the actual facts are different, then this ruling shall be without force and effect insofar as the herein parties are concerned. Very truly yours, Commissioner of Internal Revenue By: (SGD.) LARRY M. BARCELO OIC-Assistant Commissioner Legal Service