Embassy of the Federal Republic of Nigeria

May 27, 2022 DA ITAD BIR RULING NO. 024-22 Principle of Reciprocity; BIR Ruling No. ITAD-100-12 Embassy of the Federal Republic of Nigeria 2211 Paraiso Street Dasmarias Village Makati City, Metro Manila Gentlemen : This has reference to your Note No. NE/04/03/2022 dated 30 March, 2022 referred to this Office by the Department of Finance and the Department of Foreign Affairs (DFA), requesting for the exemption from the payment of value-added (VAT) and ad valorem taxes on the local purchase of a motor vehicle for the personal use of ____________________, __________ of the Embassy of the Federal Republic of Nigeria, specifically described as follows: MAKE YEAR COLOR FRAME NUMBER ENGINE NUMBER Toyota Rav4 4x2 2.5 XLE 2020 Silver Metallic JTMW13FV0LJ021425 A25A0622499 In reply, please be informed that Article 34 of the Vienna Convention on Diplomatic Relations states that 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, thus: "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" In other words, purchases by the Embassy or its agents of goods and/or services shall, in general, be subject to the 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 hereby confirms that VAT and ad valorem tax exemption to the Embassy of the Federal Republic of Nigeria and/or its personnel on their local purchase of motor vehicles since it appears from the DFA VAT matrix dated March 31, 2022, 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 sale of one (1) unit of 2020 Toyota Rav4 4x2 2.5 XLE for the personal use of ____________________, __________ of the Embassy of the Federal Republic of Nigeria, being an exempt entity, 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. This ruling is issued on the basis of the facts as represented. However, if it will be disclosed upon investigation 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 Assistant Commissioner Legal Service