DA ITAD BIR Ruling No. 091-14

November 12, 2014 DA ITAD BIR RULING NO. 091-14 Principle of Reciprocity; BIR Ruling No. ITAD-117-12 The Embassy of Libya 2056 Lumbang corner Caballero Streets Dasmarias Village, Makati City Attention: Mr. Abobaker I.W. Ataweel Charge d' Affaires, a.i. Gentlemen : This has reference to your Note No. 155/14 dated September 15, 2014 referred to this Office by the Department of Finance (DOF) and the Department of Foreign Affairs (DFA), on the report of sale of a tax-exempt motor vehicle owned by the Embassy of Singapore, as represented by Ms. Stephanie Or of the Embassy of Singapore to Mr. Mohamed R.I. Gadsh, Assistant Consular Attach of the Embassy of Libya, specifically described as follows: Make Model Chassis Number Engine Number Plate Year Number Toyota Camry 2.4V 2004 ACV309001290 2AZ1557930 3653 A/T 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; TacSAE 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 Libya and/or its personnel on their local purchase of motor vehicles it appearing from the list submitted by the DFA dated October 13, 2014 that the Government of Libya allows similar exemption to the Philippine Embassy and/or its personnel on their purchase of motor vehicles in Libya. Hence, since the transferor and the transferee of the subject motor vehicle, are VAT-exempt entity/individual, the sale of one (1) unit 2004 Toyota Camry 2.4V A/T by the Embassy of Singapore, as represented by Ms. Stephanie Or to Mr. Mohamed R.I. Gadsh, for the latter's personal use continues to be exempt from VAT. (BIR Ruling No. ITAD-117-12 dated March 12, 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 Bureau of Internal Revenue