Embassy of Finland

November 15, 2022 ITAD BIR RULING NO. 017-22 Principle of Reciprocity Embassy of Finland 21st Floor, BPI Buendia Center Senator Gil J. Puyat Avenue MCPO Box 2447 1264 Makati City Gentlemen : This refers to your Verbal Note dated October 3, 2022 which has been indorsed by the Department of Foreign Affairs, Office of Protocol (DFA-OP) on October 25, 2022. The DFA-OP further recommended that a Value-Added Tax (VAT) Certificate (VC) be issued in favor of the Embassy of Finland and its qualified personnel, thereby shifting the mode of VAT exemption privileges from refund/reimbursement to point-of-sale basis. 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, 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. In the Certification dated October 3, 2022, the Embassy of Finland confirmed that the Government of Finland accords tax exemption privileges to the accredited Diplomatic Missions and diplomatic personnel by way of refund, and that refund claims in Finland are processed within two (2) weeks from the submission of the request, with a minimum purchase amount of 170.00 (approximately PHP9,846.19 based on prevailing BSP exchange rate). Based on the foregoing, and considering the efficient processing of VAT refund claims of diplomatic missions and their accredited diplomatic personnel, this Office is of the opinion as it hereby rules that, applying the principle of reciprocity, the Embassy of Finland and its qualified diplomatic personnel in the Philippines are entitled to the same VAT exemption privileges at point-of-sale subject only to the minimum purchase amount of 170.00 per item/service including VAT. Accordingly, the Embassy of Finland and its qualified personnel shall be issued with VAT Certificates for their local purchase of goods and services (including utilities) in the Philippines. This ruling amends and supersedes BIR Ruling No. ITAD-001-21 dated January 4, 2021. This Bureau avails itself of this opportunity to renew to the Embassy of Finland assurances of its highest consideration. Very truly yours, (SGD.) LILIA CATRIS GUILLERMO Commissioner of Internal Revenue