DA ITAD BIR Ruling No. 120-07

December 10, 2007 DA ITAD BIR RULING NO. 120-07 Sec. 106, 108 & 149 of the National Internal Revenue Code of 1997; Article 34, Vienna Convention; BIR Ruling No. DA-ITAD-109-06 Embassy of Switzerland 24/F Equitable Bank Tower 8751 Paseo de Roxas, Makati City Gentlemen : This has reference to your Note Verbale No. 76/2007 dated November 8, 2007, referred to this Office by the Department of Finance (DOF) and the Office of Protocol, Department of Foreign Affairs (DFA), requesting for a tax-free purchase on a local motor vehicle for the personal use of Ms. Stephanie Perillard, Attache of the Embassy of Switzerland, specifically described as follows: DHSCTI Make: Mitsubishi Strada GLS 3.2li 4x4 Pickup Model Year: 2007 Color: Blue Engine Number: UCAF4413 VIN Number: MMBJNKB808D004103 C/S Number: BF-6570 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; "xxx xxx xxx" Thus, the tax exemption privilege of an Embassy and its diplomatic agents does not include exemptions from the value-added tax (VAT) and ad valorem taxes 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, and ad valorem taxes under Section 149, all of the National Internal Revenue Code of 1997. STcaDI However, applying the principle of reciprocity, this Office may confirm VAT exemption of the Embassy of Switzerland or its personnel on their local purchase of motor vehicles it appearing from the list submitted by the Department of Foreign Affairs as of August 24, 2007 that your Government allows similar exemption to Philippine Embassy and/or its personnel on their purchases of locally-assembled motor vehicles thereat. Hence, the herein request for tax-free local purchase of one (1) Mitsubishi Strada GLS 3.2li 4x4 Pickup, for the personal use of Ms. Stephanie Perillard, Attache the Embassy of Switzerland, is hereby granted. (BIR Ruling No. DA-ITAD-109-06 dated September 19, 2006) 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. HSaIDc Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service