Mr. Porfirio M. Mayo, Jr.

January 9, 2020 ITAD BIR RULING NO. 010-20 PH-ADB Headquarters Agreement; RR No. 4-2017 Mr. Porfirio M. Mayo, Jr. Acting Head of Office Office of Protocol Department of Foreign Affairs 2330 Roxas Boulevard 1300 Pasay City Gentlemen : This refers to your letter dated 23 September 2019 requesting for the issuance of a ruling in favor of the listed Asian Development Bank (ADB) non-Filipino officers who are eligible for the restoration of the initial car privilege (imported, tax-exempt motor vehicle), pursuant to the conditions set forth by Department of Finance (DOF) Secretary Carlos G. Dominguez in his letter to Department of Foreign Affairs (DFA) Secretary Teodoro L. Locsin, Jr. dated 22 April 2019 (DOF letter). In the said DOF letter, the DOF has no objection to the restoration of the option to purchase an imported tax-exempt vehicle by the ADB officers and staff, as originally provided in Section 45 (f) of the ADB Headquarters Agreement, subject only to the following conditions: AIDSTE 1. The ADB officers and staff must be included in the list provided by the ADB as of 27 June 2018; 2. They must have taken their post within twelve (12) months prior to the suspension of the second car privilege, pursuant to the DOF letter dated 17 February 2015 issued by then DOF Secretary Cesar V. Purisima; 3. They must not be Filipino nationals, pursuant to ITAD BIR Ruling No. 17-2017; 4. They shall be given one (1) year to avail themselves of this program with the inclusive dates to be mutually agreed upon by the DFA and the ADB. Those who fail to avail of the program within the inclusive dates shall forfeit their privilege; 5. They should have first disposed of their current tax-exempt motor vehicle; and 6. ADB must secure a one-time ruling from the Bureau of Internal Revenue confirming the exemption from securing the Authority to Release Imported Goods (ATRIG), in connection with the importation of automobiles as required under Revenue Regulations No. 4-2017. Hence, this request for ruling. In reply, please be informed that Revenue Regulations (RR) No. 4-2017 which amended certain provisions of RR No. 2-2016, provides as follows: " SECTION 2. AMENDMENTS. Items III and IV of Revenue Regulations No. 2-2016 shall be amended as follows: III. Legal Basis xxx xxx xxx Finally, under the provisions of effective International Agreements and the principle of reciprocity, Recognized International Organizations and Foreign Embassies in the Philippines are exempted from all taxes, hence, the exemption from requirement of securing an ATRIG . IV. When and under what circumstances ATRIG is issued xxx xxx xxx However, Foreign Embassies and Recognized International Organizations are exempt from securing ATRIG pursuant to the principle of reciprocity and international agreements to which the Philippines is a signatory, respectively. SDAaTC In cases where automobiles are subsequently sold, transferred, or exchanged in the Philippines to non-exempt persons, or entities, including the introduction and re-introduction into customs territory of automobiles intended for exclusive use within the freeport zones, the purchaser or transferee, owner/possessor of the automobiles shall be considered as the importer, and shall be liable for the excise tax due on such importation to be computed based on existing issuances. " (Underscoring ours) Relative thereto, Section 45, Article XII of the Agreement between the Asian Development Bank and the Government of the Republic of the Philippines Regarding the Headquarters of the Asian Development Bank signed on 22 December 1966 (PH-ADB Headquarters Agreement), provides: " ARTICLE XII Privileges and Immunities of Governors and Other Representatives of Members, Directors, President, Vice President and Others Section 45 Officers and staff of the Bank, including for the purposes of this Article experts and consultants performing missions for the Bank, shall enjoy the following privileges and immunities. xxx xxx xxx (f) The right to import, free of duty and other levies, prohibitions and restrictions on imports, their furniture and effects including one automobile, within twelve (12) months after first taking up their post in the Republic of the Philippines, and the same right to import one automobile for replacement (3) years after the last importation . Should the previously imported automobile be sold, conveyed, or transferred, due notice shall be given by the Bank to the Government and delivery shall be made at the place designated by the Government in consultation with the Bank ;" (Underscoring ours) Under the PH-ADB Headquarters Agreement, the Philippines recognizes the right of ADB officers and staff to import, free of duty and other levies, one (1) automobile for replacement (3) years after the last importation. Pursuant to the DOF letter, the said right to initial car privilege may be granted to eligible ADB non-Filipino officers and staff who opted to purchase local tax-exempt motor vehicle pursuant to the Memorandum of the Executive Secretary dated 15 August 1973 as their initial vehicle, subject to certain conditions. Considering the DFA's confirmation of the names of the ADB's non-Filipino officers eligible for the restoration of the initial car privilege; and that these officers have taken up their post in the Philippines within twelve (12) months prior to the suspension of the second car privilege on 17 February 2015, this Bureau is of the opinion and so holds that the ADB non-Filipino officers listed in Annex A hereof are exempt from the requirement to secure ATRIG on their importation of motor vehicle, thereby completing the last requirement set forth in the DOF letter. This ruling CANCELS and SUPERSEDES BIR Ruling No. ITAD-030-18 and all other BIR rulings inconsistent herewith, and is issued on the basis of the facts as represented. However, if upon investigation it shall be disclosed that the actual facts are different, then this ruling shall be without force and effect insofar as the herein parties are concerned. AaCTcI Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue ANNEX 1 List of ADB Non-Filipino Officers Eligible for the Restoration of the Right to Import TEV NAME NATIONALITY DATE OF ASSUMPTION 1. AAA Indonesian 10 July 2002 2. BBB Japanese 30 July 2012 3. CCC Indonesian 26 October 2009 4. DDD Indian 03 November 2009 5. EEE Italian 28 July 2009 6. FFF Australian 02 September 2013 7. GGG Italian 08 November 2011 8. HHH American 10 August 2009 9. III French 03 September 2008 10. JJJ Australian 01 August 2011 11. KKK New Zealander 11 June 2008 12. LLL Belgian 25 January 2010 13. MMM Vietnamese 11 April 2008 14. NNN Indian 11 May 2010 15. OOO Japanese 23 June 1997 16. PPP Korean 16 January 2012 17. QQQ British 08 January 2009 18. RRR Indian 20 September 2010 19. SSS Bhutanese 22 February 2005 20. TTT German 21 October 2013 21. UUU Indian 12 November 2012 22. VVV Kazakh 22 August 2000 23. WWW Indian 20 September 2010 24. XXX Indian 14 May 2013 25. YYY British 17 July 2006 26. ZZZ American 16 January 2006 27. AAAA Japanese 25 January 2010 28. BBBB Australian 16 January 2012 29. CCCC Australian 16 December 2013 30. DDDD Australian 03 December 2009 31. EEEE British 31 May 2010 32. FFFF Japanese 03 December 2007 33. GGGG Australian 08 November 2007 34. HHHH Indian 01 August 2011 35. IIII Indian 07 August 2008 36. JJJJ Australian 18 November 2008 37. KKKK American 18 June 2012 38. LLLL Japanese 12 May 2014 39. MMMM Japanese 02 October 2008 40. NNNN Japanese 02 July 2018 41. OOOO Japanese 18 August 2014 42. PPPP Australian 14 May 2012 43. QQQQ Indian 03 April 2008 44. RRRR Tongan 10 August 2009 45. SSSS American 08 September 2014 46. TTTT Chinese 10 October 2006