Embassy of the Arab Republic of Egypt

March 30, 2022 ITAD BIR RULING NO. 004-22 Principle of Reciprocity; Revenue Memorandum Order (RMO) No. 10-2019, as amended by RMO No. 41-2020 Embassy of the Arab Republic of Egypt 7th Floor, G.C. Corporate Plaza 150 Legaspi Street, Legaspi Village 1229 Makati City Gentlemen : This refers to the Value-Added Tax (VAT) exemption on the local purchase of goods and services of the Embassy of the Arab Republic of Egypt and its qualified personnel in the Philippines, as referred to this Office by the Department of Foreign Affairs, Office of Protocol (DFA-OP). 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 confirm the VAT exemption privileges granted 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. Based on the information received from the DFA-OP in its indorsement dated March 4, 2022 and the DFA Matrix of VAT Privileges Enjoyed by the Philippine Foreign Service Posts as of March 3, 2022, the Philippine Embassy, its diplomatic and non-diplomatic personnel in Cairo enjoy VAT exemption privileges on their purchase of goods and services in Cairo, subject to the following limitations: 1. The Embassy is exempt from VAT on its local purchases of goods (including wines up to a maximum of 35 bottles, alcohol, and tobacco but except fuel, gas, petrol for all kinds of transportation/motor vehicles) and services ( except utilities, i.e. , telephone, water, electricity, cable); 2. The diplomatic and non-diplomatic personnel are only exempt from VAT on their local purchases of wines, alcohol and tobacco; and 3. Only the Embassy and its diplomatic personnel are exempt from VAT on their local purchases of motor vehicle. In view of the foregoing and considering the DFA-OP's recommendation in its letter dated February 10, 2020 to the Ambassador of the Embassy of Egypt, this Office is of the opinion as it hereby rules that the Embassy of the Arab Republic of Egypt, its diplomatic and non-diplomatic personnel in the Philippines are entitled to VAT exemption privileges on their local purchases of goods and services by way of reimbursement/refund . Accordingly, the Embassy, its diplomatic and non-diplomatic personnel may proceed to secure the necessary VAT reimbursement/refund on their local purchases of 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, as amended by RMO No. 41-2020. Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue