Embassy of the Republic of Korea

August 12, 2022 ITAD BIR RULING NO. 014-22 Principle of Reciprocity; RMO No. 10-2019, as amended by RMO No. 41-2020 Embassy of the Republic of Korea 122 Upper McKinley Road McKinley Town Center, Fort Bonifacio 1634 Taguig City Gentlemen : This refers to the value-added tax (VAT) exemption privileges of the Embassy of the Republic of Korea (the Embassy), its Consulate in Cebu, their diplomatic personnel and qualified dependents. 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, consulate and its members on the basis of reciprocity, provided that they can submit to the Commissioner of Internal Revenue a 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 letter of the Office of Protocol of the Department of Foreign Affairs (DFA-OP) dated July 15, 2022 and the DFA-Matrix of VAT Privileges Enjoyed by the Philippine Foreign Service Posts as of July 15, 2022, the Philippine Embassy (PE), its diplomatic and the latter's dependents in Seoul, Korea enjoy VAT exemption privileges through a combination of point of sale and reimbursement/refund , subject to the following limitations: 1. Point-of-sale Hotel accommodation and purchase of fuel of the Embassy and its diplomatic personnel; Purchase of fuel is limited to 600 liters/month per official motor vehicle and 400 liters/month per private motor vehicle; and Minimum amount of purchase is 50,000 (approximately Php2,157) per invoice/receipt for official and personal purchase. 2. Refund/Reimbursement Purchase of goods and services of the Embassy, its diplomatic personnel and qualified dependents (except restaurant); The maximum quantity of personal purchase of liquor and wine is 90 bottles and 18 cartons for cigarettes; The maximum amount of VAT refund per year for personal purchase is 2,000,000 (approximately Php86,287); and No limit is applied for official purchases of the Embassy. Based on the foregoing, this Office is of the opinion as it hereby rules that, applying the principle of reciprocity, the Embassy of the Republic of Korea, its diplomatic and the latter's qualified dependents are entitled to the same VAT exemption privileges. Accordingly, except for hotel accommodation and purchase of fuel which are eligible for point-of-sale VAT exemption, the grant of VAT exemption privilege for all other purchases of the Embassy, its diplomatic and qualified dependents is by way of refund. Thus, they may proceed to secure the necessary VAT refund on their purchases of goods and services (except restaurant) 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.) LILIA CATRIS GUILLERMO Commissioner of Internal Revenue