Embassy of the Federal Republic of Nigeria

September 24, 2020 DA ITAD BIR RULING NO. 016-20 Principle of Reciprocity; BIR Ruling No. ITAD-100-12 Embassy of the Federal Republic of Nigeria 2211 Paraiso Street, Dasmarias Village 1221 Makati City Attention: AAA _______________ Gentlemen : This refers to your Note Verbale dated 13 July 2020 referred to this Office by the Department of Finance (DOF) and the Department of Foreign Affairs (DFA), requesting for exemption from payment of value-added tax (VAT) and ad valorem tax on the local purchase of a motor vehicle for the personal use of BBB, __________ of the Embassy of the Federal Republic of Nigeria, specifically described as follows: acEHCD Type of Use: Personal Make: 2020 Toyota Prado 4.0 Gas A/T-Z7-040 Color: Attitude Black Mica Motor/Engine No.: 1GRC105764 VIN/Chassis No.: JTEBU3FJXKK184378 CS No.: _______ 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 goods or services; x x x." (Underscoring supplied) Thus, the tax exemption privilege of an Embassy and its diplomatic agents does not include exemption from VAT and ad valorem tax, which are indirect taxes, on their local purchase of goods and services. In other words, purchases by that Embassy or its agents of goods and services shall, in general, be subject to VAT and ad valorem tax under Sections 106 and 149 of the National Internal Revenue Code (NIRC) of 1997, as amended, respectively. However, applying the principle of reciprocity, this Office may confirm VAT and ad valorem tax exemption in favor of the Embassy of the Federal Republic of Nigeria and/or its personnel on their local purchase of motor vehicles since it appears from the list submitted by the DFA dated 08 September 2020 that the Government of the Federal Republic of Nigeria allows similar exemption to the Philippine Embassy and/or its personnel on their purchase of motor vehicles in Nigeria. In view thereof, the local purchase of one (1) unit of 2020 Toyota Prado 4.0 Gas A/T Z7-040, for the personal use of BBB, __________ of the Embassy of the Federal Republic of Nigeria, an exempt individual, shall be subject to VAT at zero-percent (0%) rate pursuant to Section 106 (A) (2) (b) of the NIRC of 1997, as amended. Such sale is likewise exempt from ad valorem tax pursuant to Section 9 of Revenue Regulations No. 25-2003. (BIR Ruling No. ITAD-100-12 dated 20 February 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