DA ITAD BIR Ruling No. 152-06

December 11, 2006 DA ITAD BIR RULING NO. 152-06 Sec 106 & 108 of the Tax Code 1997; Article 34, Vienna Convention on Diplomatic Relations; BIR Ruling No. DA-ITAD-001-99 Embassy of the Federal Republic of Nigeria 2211 Paraiso Street Dasmarias Village Makati City Attention: Mr. Fonma T. Usoro Administrative Attach Gentlemen : This has reference to your Note No. NE/16/10/2006 dated October 25, 2006, referred to this Office by the Department of Finance and the Department of Foreign Affairs, requesting for the exemption from payment of taxes on the local purchase of a motor vehicle, for the personal use of Mr. Fonma T. Usoro, Administrative Attach of the Embassy of the Federal Republic of Nigeria, specifically described as follows: Type of Use: Personal Make: Mitsubishi Pajero Gas 2.5 (MT) Model Year: 1995 Chassis Number: DONV320SJ00383 Engine Number: 4G54B6388 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; "xxx xxx xxx" Thus, the tax exemption privilege of an Embassy and its diplomatic agents does not include exemption from the value-added tax (VAT) on its local purchases of locally-assembled motor vehicles. In other words, purchases by that Embassy and its diplomatic agents of locally-assembled motor vehicles shall, in general, be subject to the value-added tax prescribed under Sections 106 and 108 of the National Internal Revenue Code of 1997. TDaAHS However, applying the principle of reciprocity, this Office may confirm exemption to the Embassy of the Federal Republic of Nigeria and its personnel on their local purchases of goods and/or services, specifically on the purchase of locally-assembled motor vehicles, it appearing from the list submitted by the Department of Foreign Affairs as of October 18, 2005 that your Government allows similar exemption to the Philippine Embassy and its personnel on their purchases of goods and services in your country. cda2007tax Hence, the local purchase of one (1) unit of 1995 Mitsubishi Pajero Gas 2.5 (MT), for the personal use of Mr. Fonma T. Usoro, Administrative Attach of the Embassy of the Federal Republic of Nigeria is exempt from VAT. (BIR Ruling No. DA-ITAD-001-99 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