Royal Thai Embassy

August 5, 2022 DA ITAD BIR RULING NO. 032-22 Principle of Reciprocity; BIR Ruling No. ITAD-068-20 Royal Thai Embassy 107 Rada Street Legaspi Village 1229 Makati City Attention: Narttaporn Nitimontree Minister Counsellor Gentlemen : This refers to your Note No. 40001/277 dated July 20, 2022 referred to this Office by the Department of Finance 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 official use of the Royal Thai Embassy, specifically described as follows: MAKE YEAR COLOR FRAME NUMBER ENGINE NUMBER Toyota Hiace Super Grandia Elite 2022 Raven Black JTFWA3AP6N8010729 1GD8968832 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 the VAT and ad valorem tax exemption of the Royal Thai Embassy and/or its personnel on their local purchase of motor vehicle since it appears from the DFA VAT Matrix dated July 15, 2022 that the Government of Thailand allows similar exemption to the Philippine Embassy and/or its personnel on their purchase of motor vehicles in Thailand. In view thereof, the local sale of one (1) unit of 2022 Toyota Hiace Super Grandia Elite for the official use of the Royal Thai Embassy, 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, (SGD.) LARRY M. BARCELO Assistant Commissioner Legal Service