Embassy of the State of Palestine

January 4, 2021 ITAD BIR RULING NO. 002-21 Principle of Reciprocity; Revenue Memorandum Order No. 10-2019 Embassy of the State of Palestine 2nd Floor, 112 LPT Tower Legaspi Village 1229 Makati City Gentlemen : This refers to the request for confirmation of Value-Added Tax (VAT) exemption privilege in favor of the Embassy of the State of Palestine and its qualified personnel by way of reimbursement/refund, as indorsed by the Department of Foreign Affairs, Office of Protocol (DFA-OP) in its letter dated 28 September 2020. CAIHTE 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). 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 a 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 recommendation of the DFA-OP in its letter dated 28 September 2020, and the DFA Matrix of VAT Privileges Enjoyed by the Philippines Foreign Service Posts dated 17 September 2020, the Government of the State of Palestine accords the resident foreign missions and their diplomatic personnel tax exemption privileges on purchase of goods and services by way of reimbursement/refund. There is no minimum amount requirement to avail of exemption. 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 the State of Palestine and its diplomatic personnel are entitled to the same VAT exemption privileges by way of reimbursement/refund . Accordingly, the Embassy of the State of Palestine 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 the State of Palestine assurances of its highest consideration. aScITE Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue