Embassy of Finland

January 4, 2021 ITAD BIR RULING NO. 001-21 Principle of Reciprocity; Revenue Memorandum Order No. 10-2019 Embassy of Finland 21st Floor, BPI Buendia Center Senator Gil J. Puyat Avenue MCPO Box 2447 1264 Makati City Gentlemen : This refers to your Verbal Note No. PF0Y69KV-61 dated 07 October 2020, indorsed by the Department of Foreign Affairs, Office of Protocol (DFA-OP), requesting for a BIR ruling on the Value-Added Tax (VAT) exemption privilege of the Embassy of Finland and its qualified personnel by way of reimbursement/refund. In reply, please be informed that while the Vienna Convention on Diplomatic Relations of 1961 exempts diplomatic missions ( i.e. , embassies and consulates) and their diplomatic agents from all dues and taxes, personal or real, national, regional or municipal, they are, however, subject to the indirect taxes of a kind which are normally incorporated in the price of goods or services ( e.g. , VAT). HTcADC Nevertheless, under the principle of reciprocity, this Office may grant tax privileges to a foreign embassy and to its members on their local purchases of goods and services, provided that they can submit to the Commissioner of Internal Revenue proof that the foreign government of the concerned embassy allows similar tax privileges to the Philippine Embassy or its personnel on purchases of goods or services in their country. As per the Indorsement of the DFA-OP dated 08 October 2020, and the DFA Matrix of VAT Privileges Enjoyed by the Philippines Foreign Service Posts dated 01 October 2020, the Philippine Embassy in Oslo, Norway, which has concurrent jurisdiction over Finland, has confirmed that diplomatic missions and their diplomatic personnel, including the latter's legal dependents, enjoy VAT exemption privileges on local purchase of goods and services in Finland by way of reimbursement/refund, subject to the following limitations: 1. Minimum amount of purchase should be 170.00 ; 2. For electricity, telephone, water, fuel and heating oil total allowed amount of refund per quarter of a year is 170.00 . Based on the foregoing, this Office is of the opinion as it hereby rules that, applying the principle of reciprocity and pursuant to Revenue Memorandum Order (RMO) No. 10-2019, the Embassy of Finland and its diplomatic personnel in the Philippines are entitled to the same VAT exemption privilege by way of reimbursement/refund subject to the aforementioned limitations. Accordingly, the Embassy of Finland may proceed to secure the necessary VAT reimbursement/refund on local purchases of all goods and services in the Philippines following the guidelines set forth in RMO No. 10-2019. This Bureau avails itself of this opportunity to renew to the Embassy of Finland assurances of its highest consideration. Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue