DA ITAD BIR Ruling No. 079-09

August 20, 2009 DA ITAD BIR RULING NO. 079-09 Sections 106 & 108 of the National Internal Revenue Code of 1997; Article 34, Vienna Convention on Diplomatic Relations; BIR Ruling No. ITAD-001-99 Embassy of the Federal Republic of Nigeria 2211 Paraiso Street, Dasmarias Village Makati City Attention: Mr. Charles Omokehinde Akintunde Minister Gentlemen : This has reference to your Note Verbale No. NE/12/06/2009 dated June 26, 2009, referred to this Office by the Department of Finance (DOF) and the Office of Protocol and State Visits of the Department of Foreign Affairs (DFA), requesting exemption from payment of value-added tax (VAT) on the purchase of one (1) motor vehicle, by Mr. Charles Omokehinde Akintunde, Minister of the Embassy of the Federal Republic of Nigeria, specifically described as follows: Make : Nissan Teana J31 VQ 2.3L A/T (Luxury) 230 JM Year Model : 2009 Color : Sapphire Blue Chassis No. : JN1BAUJ31U0307996 Engine No. : VQ23-247966A 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 goods or services; . . . ." (Emphasis supplied) Thus, the tax exemption privilege of an Embassy and its diplomatic agents does not include exemption from VAT, which is an indirect tax, 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, both of the National Internal Revenue Code of 1997, as amended. However, applying the principle of reciprocity, this Office may confirm the VAT 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 February 10, 2009, that the Government of Nigeria allows similar exemption to the Philippine Embassy and/or its personnel on their local purchases of motor vehicles thereat. TIADCc Hence, the herein local purchase of one (1) unit 2009 Nissan Teana J31 VQ 2.3L A/T (Luxury) 230 JM for the use of Mr. Charles Omokehinde Akintunde, Minister of the Embassy of the Federal Republic of Nigeria, is exempt from VAT on the basis of reciprocity. (BIR RULING No. ITAD-001-09 dated June 24, 1999) 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, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service