DA ITAD BIR Ruling No. 044-17

November 24, 2017 DA ITAD BIR RULING NO. 044-17 Principle of Reciprocity; BIR Ruling No. ITAD-266-12 Embassy of the Hellenic Republic of Greece Unit 701 Sedeco I Bldg. cor. Rada & Legaspi Street Legaspi Village, Makati City Gentlemen : This has reference to your Note No. 085.3/40/457 dated November 3, 2017 referred to this Office by the Department of Finance and the Department of Foreign Affairs, 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 official use of the Embassy of the Hellenic Republic of Greece, specifically described as follows: DcHSEa Type of Use: Official Make: Nissan Sylphy 1.8 CVT Model Year: 2017 Color: Frony Black Frame Number: MNTBAAB17Z0008953 Engine Number: MRA8360352R 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 Hellenic Republic of Greece and/or its personnel on their local purchase of motor vehicles it appearing from the list submitted by the DFA dated July 13, 2017 that the Government of the Hellenic Republic of Greece allows similar exemption to the Philippine Embassy and/or its personnel on their purchase of motor vehicles in Greece. In view thereof, the local sale of one (1) unit of 2017 Nissan Sylphy 1.8 CVT for the official use of the Embassy of the Hellenic Republic of Greece, being an entity exempt from VAT, shall be subject to VAT at zero-percent (0%) rate pursuant to Section 106 (A) (2) (c) of the NIRC of 1997 as amended. (BIR Ruling No. ITAD-266-12 dated June 22, 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.) MARISSA O. CABREROS Assistant Commissioner Legal Service