DA ITAD BIR Ruling No. 048-14

June 5, 2014 DA ITAD BIR RULING NO. 048-14 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 Attention: Mr. Murtala Jimoh Counsellor/Head of Chancery Gentlemen : This has reference to your Note No. NE/06/04/2014 dated April 25, 2014 referred to this Office by the Department of Finance (DOF) and the Department of Foreign Affairs (DFA), requesting for the exemption from the payment of value-added tax (VAT) on the local purchase of a motor vehicle for personal use of Mr. Murtala Jimoh, Counsellor/Head of Chancery of the Embassy of the Federal Republic of Nigeria, specifically described as follows: Type of Use: Personal Make: Kia Sportage 2.0 EX A/T 4x2 Model Year: 2012 Color: Sand Track Frame Number: KNAPC811BD7378078 Engine Number: G4KDCH362609 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. DAHSaT However, applying the principle of reciprocity, this Office may confirm exemption of the Embassy of the Federal Republic of Nigeria and/or its personnel on their local purchase of motor vehicles it appearing from the list submitted by the DFA dated July 23, 2013 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 2012 Kia Sportage 2.0 EX A/T 4x2 for personal use of Mr. Murtala Jimoh, Counsellor/Head of Chancery of the Embassy of the Federal Republic of Nigeria, being an individual exempt from VAT, should 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-100-12 dated February 20, 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