United Nations Children's Fund (UNICEF)

September 13, 2023 DA ITAD BIR RULING NO. 033-23 Sec. 106 (A) (2) (b), Tax Code, as amended; RR No. 25-2003; Article VI (a), PH-UNICEF Agreement; BIR Ruling No. ITAD-014-14 United Nations Children's Fund (UNICEF) 14th Floor, North Tower, Rockwell Business Center Sheridan Sheridan Street corner United Street, Highway Hills 1550 Mandaluyong City Gentlemen : This refers to your letter dated August 15, 2023 indorsed to this Office by the Department of Finance (DOF) and the Department of Foreign Affairs (DFA), requesting exemption from value-added tax (VAT) and ad valorem tax on the local purchase of motor vehicle for the official use of the Mindanao Field Office of the United Nations Children's Fund (UNICEF), specifically described as follows: ICHDca MAKE YEAR COLOR FRAME NUMBER ENGINE NUMBER Toyota Fortuner 2.8 LTD 4x4 A/T 2T Pearl-6Y-0 2023 Platinum WP MICA/Attitude Black Mica MHFBA3FS7P1051326 IGD5403904 Under Article VI (a) of the Agreement between the UNICEF and the Government of the Philippines Concerning the Activities of the UNICEF in the Philippines (PH-UNICEF Agreement), 1 the UNICEF, its assets, property, income and its operations and transactions are immune from taxes imposed by the government, its political subdivisions and any public authority in the Philippines, to wit: " Article VI IMMUNITY FROM TAXATION a) The Fund, its assets, property, income and its operations and transactions, of whatsoever nature, shall be immune from all taxes, fees, tolls, or duties imposed by the Government or by any political sub-division thereof or by any other public authority in the Republic of the Philippines. The Fund shall also be immune from liability for the collection or payment of any tax, fee, toll, or duty imposed by the Government or any political sub-division thereof or by any other public authority. xxx xxx xxx" Moreover, pursuant to Section 106 (A) (2) (b) of the National Internal Revenue Code of 1997 (Tax Code), as amended, sales of goods by VAT-registered sellers to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects such sales to zero rate, are subject to VAT at zero percent (0%) rate, thus: cDHAES "SEC. 106. Value-Added Tax on Sale of Goods or Properties. (A) Rate and Base of Tax . There shall be levied, assessed and collected on every sale, barter or exchange of goods or properties, value-added tax equivalent to twelve percent (12%) of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged, such tax to be paid by the seller or transferor. xxx xxx xxx (2) The following sales by VAT-registered persons shall be subject to zero percent (0%) rate: xxx xxx xxx (b) Sales to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects such sales to zero rate." Accordingly, the local sale of one (1) unit of Toyota Fortuner by the VAT-registered local car dealer for the official use of the UNICEF is subject to VAT at zero-percent (0%) rate. 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 Footnotes 1. Signed and entered into force on November 20, 1948.