Embassy of the Republic of Indonesia

March 4, 2021 ITAD BIR RULING NO. 005-21 Principle of Reciprocity; RMO No. 10-2019, as amended by RMO No. 41-2020 Embassy of the Republic of Indonesia 185 Salcedo Street Legaspi Village 1229 Makati City Gentlemen : This refers to your Note No. PK/027/I/2021 dated 15 January 2021, indorsed by the Department of Foreign Affairs, Office of Protocol (DFA-OP), requesting for ruling exempting the Indonesian Consulate in Davao City, its qualified personnel and the latter's dependents from value-added tax (VAT) on the local purchase of goods and services, including bicycles, sports and leisure equipment. DETACa In reply, please be informed that while the Vienna Convention on Consular Relations of 1963 exempts consular posts and their consular officers 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 consular post and to its officers 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 consulate allows similar tax privileges to the Philippine Consular Offices or its personnel on purchases of goods or services in their country. As per the Indorsement of the DFA-OP dated 21 January 2021, the Philippine Consular Offices based in Indonesia, its qualified personnel including their dependents enjoy VAT exemption privileges on purchase of goods and services through reimbursement/refund basis, subject to the following limitations: 1. Minimum amount required per single invoice is USD200 ( more or less PhP10,115.00 ); 2. Exemption privileges is limited to the following goods and services: a. Consumable goods; b. Jewelry; c. Electronics; d. Furniture; e. Fuel; f. Office supplies; g. Rental of real property (land, building or apartment) and its maintenance; h. Electricity; i. Telecommunication; j. Services of consultant or developer; k. Domestic airline ticket; l. Hotel and restaurant; and m. Bicycles. 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, as amended by RMO No. 41-2020, the Indonesian Consulate General in Davao City, its diplomatic and non-diplomatic personnel in the Philippines including their dependents are entitled to the same VAT exemption privileges through reimbursement/refund , and not through point-of-sale basis. However, the request to include sports and leisure equipment is hereby denied as it does not fall under the term "consumable goods." Accordingly, the Indonesian Consulate General in Davao City, its diplomatic and non-diplomatic personnel, upon the expiration of their respective VAT Certificates, 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 RMO No. 10-2019, as amended by RMO No. 41-2020. This ruling CANCELS and SUPERSEDES BIR Ruling No. ITAD-045-20 issued on 17 June 2020. HEITAD Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue