ITAD BIR Ruling No. 001-10

February 5, 2010 ITAD BIR RULING NO. 001-10 Sec. 106 of the NIRC of 1997; Article 34, Vienna Convention on Diplomatic Relations Taipei Economic & Cultural Office (TECO) in the Philippines 41st Floor, Tower 1, RCBC Plaza, 6819 Ayala Avenue, Makati City Attention: Hsu, Pei-Yung Deputy Representative Taiwan, Republic of China Gentlemen : This has reference to your Note No. R.N.C. No. 098-120201 dated 2 December 2009 referred to this Office by the Department of Finance and the Department of Foreign Affairs, requesting for the exemption from payment of value-added tax (VAT) on the local purchase of a motor vehicle for the official use of the Taipei Economic & Cultural Office (TECO) specifically described as follows: DETcAH Type of Use: Official Make: Ford Everest 4X2 A/T Limited Edition Model Year: 2010 Color: Black Mica Frame Number: MNCUS4D109W304965 Engine Number: WLAT1140244 In reply, please be informed that purchases of good and/or services in the Philippines are, in general, subject to VAT prescribed under Sections 106 and 108 of the National Internal Revenue Code, as amended. However, applying the principle of reciprocity, this Office may confirm the VAT exemption of the TECO and/or its personnel on their local purchase of motor vehicles it appearing from the list submitted by the Department of Foreign Affairs dated 10 February 2009 that reciprocity exists and may be used as a basis for the grant of exemption to TECO as an entity. Hence, the local purchase of one (1) unit 2010 Ford Everest 4x2 A/T Limited Edition for the official use of TECO is exempt from VAT on the basis of reciprocity and pursuant to the 1975 Agreement between MECO and TECO and the Exchange of Letters amending the same. 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. HAICcD Very truly yours, (SGD.) JOEL L. TAN-TORRES Commissioner of Internal Revenue