United Nations Children's Fund (UNICEF)

December 5, 2022 DA ITAD BIR RULING NO. 051-22 Sec. 106 (A) (2) (B), Tax Code, as amended; RR No. 25-2003; Article VI (a) PH-UNICEF Agreement 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 letters dated September 21, 2022 and October 20, 2022 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 vehicles for the official use of the United Nations Children's Fund (UNICEF), specifically described as follows: HTcADC MAKE YEAR COLOR FRAME NUMBER ENGINE NUMBER Toyota Fortuner 2.8L 4x4 LTD AT PC 2T-X7-004 2023 Attitude Black MC/White Pearl CS MHFBA3FS3N1047965 1GD5239819 Toyota Fortuner 2.8L 4x4 LTD AT PC 2T-X7-004 2022 Attitude Black MC/White Pearl CS MHFBA3FS9N1047663 1GD5233750 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 xxx xxx xxx a) The Fund, its assets, property, income and its operations and transactions of whatever 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 of payment of any tax, fee, toll, or duty imposed by the Government or by any political sub-division thereof or by any other public authority. x x x" 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: "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. (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 two (2) units 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. CAIHTE 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.