Embassy of the Republic of India

April 18, 2018 DA ITAD BIR RULING NO. 015-18 Principle of Reciprocity; BIR Ruling No. ITAD-052-12 Embassy of the Republic of India 2190 Paraiso Street, Dasmarias Village 2123 Makati City Gentlemen : This has reference to your Note No. Mani/Admn/873/02/2017 dated March 1, 2018 referred to this Office by the Department of Finance and the Department of Foreign Affairs (DFA), requesting exemption from the payment of value-added (VAT) and ad valorem taxes on the local purchase of a motor vehicle for the official use of the Embassy of the Republic of India, specifically described as follows: aScITE Type of Use: Official Make: Toyota Fortuner 2.8L 4x4 V Dsl A/T Model Year: 2018 Color: Silver Metallic Frame Number: MHFHA3FS7J0566043 Engine Number: 1GD4393779 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 Republic of India and/or its personnel on their local purchase of motor vehicles, it appearing from the list submitted by the DFA dated February 2, 2018 that the Government of the Republic of India allows similar exemption to the Philippine Embassy and/or its personnel on their purchase of motor vehicles in India. In view thereof, the local purchase of one (1) unit of 2018 Fortuner 2.8L 4x4 V Dsl A/T for the official use of the Embassy of the Republic of India, being an exempt entity, shall be exempt from ad valorem tax and subject to VAT at zero-percent (0%) rate pursuant to Section 106 (A) (2) (b) of the NIRC of 1997, as amended. (BIR Ruling No. ITAD-052-12 dated February 14, 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 Head Revenue Executive Assistant Legal Service