Royal Thai Embassy

January 3, 2020 ITAD BIR RULING NO. 004-20 Principle of Reciprocity; Revenue Memorandum Order No. 10-2019 Royal Thai Embassy 107 Rada Street, Legaspi Village 1229 Makati City Gentlemen : This refers to your letter dated 24 September 2019, indorsed by the Department of Foreign Affairs, Office of Protocol (DFA-OP), requesting for the renewal of the Value-Added Tax (VAT) Certificate 1 previously issued to the Embassy which will expire on 21 November 2019. ETHIDa 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 nevertheless subject to the indirect taxes of a kind which are normally incorporated in the price of goods or services ( e.g. , VAT). However, on the basis 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 24 October 2019, and the DFA Matrix of VAT Privileges Enjoyed by the Philippine Foreign Service Posts dated 16 October 2019, the Philippine Embassy in Bangkok, Thailand enjoy VAT exemption privileges through reimbursement/refund , subject to the following limitation: The minimum amount of purchase per transaction is THB5,000 (approximately Php8,000, excluding VAT) . There is no minimum amount in so far as VAT exemption for electricity, tap water and telephone services . Based on the foregoing, this Office is of the opinion as it hereby rules that, applying the principle of reciprocity, the Royal Thai Embassy in the Philippines is entitled to the same VAT exemption privileges through reimbursement/refund , and not through point-of-sale basis. Hence, the expiring VAT Certificate of the Embassy shall not be renewed anymore. TIADCc Accordingly, the Royal Thai Embassy may proceed to secure the necessary VAT reimbursement/refund on purchases of local goods and services in the Philippines subject only to the aforementioned limitations, and following the guidelines set forth in Revenue Memorandum Order (RMO) No. 10-2019. Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue Footnotes 1. Formerly, Value-Added Tax Exemption Certificate (VEC).