DA ITAD BIR Ruling No. 096-14

November 27, 2014 DA ITAD BIR RULING NO. 096-14 Principle of Reciprocity; BIR Ruling No. ITAD-291-11 Embassy of the Kingdom of Belgium Multinational Bancorporation Center 9th Floor, 6805 Ayala Avenue Makati City Attention: Xavier Claude M. Leblanc Counsellor Gentlemen : This has reference to your Note No. 2014/517 dated October 29, 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. Xavier Claude M. Leblanc, Counsellor of the Embassy of the Kingdom of Belgium, specifically described as follows: Type of Use: Personal Make: Toyota Fortuner 4x2 G GAS AT Model Year 2015 Color: Attitude Black Frame Number: MHFZX69G007069594 Engine Number: 2TR-7878050 In reply, please be informed that Article 34 of the Vienna Convention on Diplomatic Relations reads: HDATCc "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 Kingdom of Belgium 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 the Kingdom of Belgium allows similar exemption to the Philippine Embassy and/or its personnel on their purchase of motor vehicles in Belgium. In view thereof, the local purchase of one (1) unit of 2015 Toyota Fortuner 4x2 G GAS AT for personal use of Mr. Xavier Claude M. Leblanc, Counsellor of the Embassy of the Kingdom of Belgium, being an individual 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 291-11 dated November 23, 2011) 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. IcEaST Very truly yours, Commissioner of Internal Revenue By: (SGD.) MARISSA O. CABREROS Assistant Commissioner Legal Service Bureau of Internal Revenue