Embassy of France

June 20, 2019 ITAD BIR RULING NO. 017-19 Principle of Reciprocity; Revenue Memorandum Order No. 10-2019 Embassy of France 16th Floor, Pacific Star Building Corner Sen. Gil Puyat Extension and Makati Avenue 1200 Makati City Gentlemen : This refers to your Note Verbale No. 2019-0272333 dated 02 May 2019, indorsed by the Department of Foreign Affairs, Office of Protocol (DFA-OP), requesting for a BIR ruling on the value-added tax (VAT) exemption on the local purchase of goods and services for the Embassy of France and its personnel. 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 its members 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 embassy allows similar tax privileges to the Philippine Embassy or its personnel on purchases of goods or services in their country. As per the Indorsement of the DFA-OP dated 06 May 2019, and the DFA Matrix of VAT Privileges Enjoyed by the Philippine Foreign Service Posts dated 05 April 2019, the Philippine Embassy and its diplomatic personnel in Paris, France enjoy VAT exemption privileges through reimbursement/refund , subject to the following limitations: 1. Purchase of goods and services a. For the Embassy only ; b. Minimum amount of purchase per invoice/receipt is 175.01 ( more or less Php11,352.25, based on prevailing BSP exchange rate ). 2. Purchase of gas, petrol, fuel and other petroleum products a. For the Embassy and its diplomatic personnel ; b. Limited only to 200 liters per month. Based on the foregoing, this Office is of the opinion as it hereby rules that, applying the principle of reciprocity, the Embassy of France 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. Accordingly, the Embassy of France 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 Revenue Memorandum Order (RMO) No. 10-2019. Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue