Embassy of India

January 7, 2020 ITAD BIR RULING NO. 006-20 Principle of Reciprocity; Revenue Memorandum Order No. 10-2019 Embassy of India 2190 Paraiso Street Dasmarias Village P.O. Box 2123, MCPO 1221 Makati City Gentlemen : This refers to your request, indorsed by the Department of Foreign Affairs, Office of Protocol (DFA-OP), for the renewal of the Value-Added Tax Exemption Certificate (VEC) 1 of your Embassy in connection with the local purchase of goods and services for official use of the Embassy. SDHTEC 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). Nevertheless, under the principle of reciprocity, this Office may grant tax privileges to a foreign embassy and to their members on their local purchases of goods and services, provided that they can submit to the Commissioner of Internal Revenue proof that the government of the concerned embassy allows similar tax privileges to the Philippine Foreign Service Post and its personnel on purchases of goods or services in their country. As per the Indorsement of the DFA-OP dated 18 July 2019, and the DFA Matrix on VAT Privileges Enjoyed by the Philippine Foreign Service Posts dated 18 July 2019, the Philippine Embassy and its diplomatic personnel (NOT EXTENDED to dependents) in New Delhi, India enjoy VAT exemption privileges on purchase of goods and services through reimbursement/refund , subject to the following limitations: 1. The ONLY utilities allowed for VAT refund are cable, internet and telephone charges; 2. PETROL and DIESEL are NOT COVERED under the tax exemption privilege. 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 India and its diplomatic personnel in the Philippines are entitled to the same VAT exemption privileges through reimbursement/refund , and not through point-of-sale basis. Hence, the expired VAT Certificate of the Embassy shall not be renewed anymore. Accordingly, your Embassy and its diplomatic personnel 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. EcTCAD This ruling CANCELS and SUPERSEDES BIR Ruling No. ITAD-032-19 issued on 14 October 2019. Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue Footnotes 1. Now called, 'Value-Added Tax Certificate' (VC), under RMO No. 10-2019.