Embassy of Finland

June 20, 2022 ITAD BIR RULING NO. 010-22 Principle of Reciprocity; RMO No. 10-2019, as amended by RMO No. 41-2020 Embassy of Finland 27th Floor, The Finance Centre 26th Street Cor. 9th Avenue Bonifacio Global City 1634 Taguig City Gentlemen : This refers to the Value-Added Tax (VAT) exemption on the local purchase of goods and services by the Embassy of Finland and its qualified personnel in the Philippines, as referred to this Office by the Department of Foreign Affairs, Office of Protocol (DFA Protocol) in its indorsement dated March 24, 2022. 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, however, subject to the indirect taxes of a kind which are normally incorporated in the price of goods or services ( e.g. , VAT). Nevertheless, this Office may confirm the tax privileges on the local purchases of goods and services of a foreign embassy and its members on the basis of reciprocity, 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 above letter of the DFA Protocol, while the Philippines has no diplomatic post in Finland, the Philippine Embassy (PE) in Stockholm, Sweden also exercises concurrent jurisdiction over Finland. The PE, its diplomatic personnel and the latter's dependents in Stockholm enjoy VAT exemption privileges through reimbursement/refund , subject to certain limitations, both for official purchases (Annex A) and personal purchases (Annex B) . 1. Minimum amount for personal purchases should be SEK1,000 (approximately PhP5,563.00 ) including VAT; 2. For alcohol products, tobacco products and fuel, the minimum amount is SEK200 (approximately PhP1,113.00 ) including VAT and excise tax. Based on the foregoing, this Office is of the opinion as it hereby rules that, applying the principle of reciprocity, the Embassy of Finland, its diplomatic personnel and the latter's dependents in the Philippines are entitled to the same VAT exemption privileges through reimbursement/refund , and not through point-of-sale basis. Accordingly, the Embassy of Finland, its diplomatic personnel and the latter's dependents may proceed to secure the necessary VAT reimbursement/refund on their 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. This ruling amends and supersedes BIR Ruling No. ITAD-008-22 dated May 18, 2022. Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue ANNEX A OFFICIAL Purchases QUALIFIED for VAT Refund 1. Goods intended for furnishing or equipping such a building intended for the acquirer, such as: furniture piano, grand piano, organ carpets wallpaper, etc. light fittings works of art handicrafts other decorative objects potted plants bicycles and equipment for physical exercise (within the embassy area) window boxes gardening tools tents for official functions in the garden of the mission other equipment for building maintenance and cleaning 2. Textile products of various kinds, such as: flags curtains, draperies tapestries fabrics for upholstery table linen bedding equipment, bed linen towels curtain rods brackets venetian blinds 3. Household equipment and similar goods, such as: kitchen utensils dishwashers washing machines freezers and refrigerators kitchen stoves and ovens vacuum cleaners sewing machines mangles fans, humidifiers, air purifiers steam bath equipment, sauna equipment 4. Equipment or printed matter for the activities of the acquirer, such as: computers and standard computer programmes calculators telefaxes typewriters telephones copying machine and other office machines general daily newspapers books catalogues programmes brochures circulars printed typing paper printed invitation cards and visiting cards radio receivers videos tape recorders television sets including cable and satellite TV equipment gramophones CD players amplifiers loudspeakers aerials, etc. cameras and projectors with or without tripod camera lenses screens with or without stand light meters photo flashes enlarging equipment splicers and similar equipment binoculars fittings and equipment other than those listed for the above-mentioned buildings, for instance, security devices for embassy premises 5. Accessories and equipment for motor vehicles owned by the acquirer 6. Services on real estate intended for the acquirer and of the goods mentioned under 1-5 or of a motor vehicle, such as: construction, structural additions or alterations cleaning, maintenance and repair work, including such work on roads, lawns and garden arrangements within the grounds manufacture to order leasing of office machines car leasing rental of tableware for official functions on the premises rental of tents for official functions on the premises design installation repairs inspections analysis maintenance alterations cleaning service is taken to include both material and labour costs 7. Telecommunication services, water, electricity, sewerage and garbage collection for a building intended for the acquirer, such as: supply of water, electric power, telecommunication services, sewage treatment and refuse collection 8. Such fuels for which energy tax and carbon tax is levied 9. Alcoholic beverages and tobacco products 10. Services related to the rental of buildings or other real estate facilities, provided that the rental service is intended for the activities carried out by the acquirer 11. Surveillance services relating to property or premises which are intended for the activities of the acquirer OFFICIAL purchases NOT QUALIFIED for VAT refund 1. Goods for and service of premises other than those of a mission or a career consular post 2. Consumer goods, such as: food batteries light bulbs fluorescent lamps gas bottles cut flowers, flower arrangements pens, copying paper files cleaning products filters cartridges for copying machines ribbons, correction tape paper napkins and plates candles, etc. 3. Cassettes, USB sticks, CDs, recording tapes, video tapes, unexposed and exposed film of all kinds, photocopying paper, chemicals and other articles for the development of photographs and films, bags 4. Boats, tents, sports equipment ( e.g. , golf clubs, skis, skates, etc.), horses and other living animals 5. Car parking, garage hire 6. Information services, advertising, consulting services, education, legal services, postal and courier services, fair expenses 7. Travel, lodgings, rental or purchase of a caravan, transportation services, removal expenses, VIP and other airport services 8. Restaurant bills, catering services, rental costs outside the embassy area ANNEX B PERSONAL purchases QUALIFIED for VAT refund 1. Equipment for domestic use for the reception, recording and playback of sound or images, such as: radio receivers television sets including cable and satellite TV equipment videos tape recorders CD players gramophones amplifiers loudspeakers mobile telephones books 2. Cameras, camera lenses and other equipment for filming or imaging, such as: cameras and projectors with or without tripod camera lenses screens with or without stand light meters photo flashes and other similar photographic equipment binoculars 3. White goods and domestic appliances, such as: dishwashers freezers and refrigerators washing machines mangles irons kitchen stoves and ovens electric grills percolators mixing machines electric beaters sewing machines vacuum cleaners 4. Computers and devices with similar functions, such as calculators 5. Furniture, lighting equipment, textiles for interior decoration, carpets, pianos and grand pianos 6. Accessories or equipment for motor vehicles or for the products mentioned in 1-5 7. Services on the goods mentioned in 1-6 or on motor vehicles manufacture to order car leasing design installation repairs inspections analysis maintenance alterations cleaning 8. Services on premises in connection with installation of goods mentioned in 3 9. Such fuels for which energy tax and carbon tax are levied 10. Alcoholic beverages and tobacco products PERSONAL purchases NOT QUALIFIED for VAT refund 1. Bedding equipment, bed linen, towels, table linen 2. Ordinary household articles, such as: saucepans, frying pans, kitchen china and crockery, dinner services, table silver and can openers 3. Decorative articles, such as: plants, vases, urns, pots, crystal goods, ashtrays, ornamental porcelain, pictures, sculptures or other works of art or handicraft, framings, jewelry, wristwatches 4. General daily newspapers, cassettes, diskettes, recording tapes, video tapes, records/CDs, USB sticks, unexposed and exposed film of all kinds, photocopying paper, chemicals and other articles for the development of photographs and film 5. Domestic animals, quarantine fee, veterinary costs 6. Musical instruments other than pianos and grand pianos 7. Boats, bicycles, golf equipment, skiing equipment, ice skates, roller blades, equipment for physical exercise, club membership fees 8. Prams, toys including computer games, baby articles 9. Clothing, footwear, suitcases, handbags 10. Foodstuffs, cosmetics, toiletries, hair driers, razors, electric toothbrushes 11. Medical supplies, spectacles, contact lenses 12. Batteries, light bulbs, fluorescent lamps, electrical supplies such as plugs and cords 13. Tools, products for plumbing, heating and sanitation, fixtures such as kitchen cupboards 14. Telecommunication services, telephone bills, electricity bills, water supply, sewage treatment, refuse collection 15. Car parking, hire of garage, estate agent's fee, for example, in connection with the purchase/renting of premises other than for a Diplomatic Mission or Career Consular Post 16. Travel, lodgings, rental or purchase of a caravan, transportation services, removal expenses 17. Restaurant bills, catering