Embassy of the Socialist Republic of Vietnam

March 9, 2020 ITAD BIR RULING NO. 021-20 Principle of Reciprocity; Revenue Memorandum Order No. 10-2019 Embassy of the Socialist Republic of Vietnam 670 Ocampo Street, Malate 1004 Manila Gentlemen : This refers to your Note No. 02/VN-CH/2020 dated 14 January 2020, indorsed by the Department of Foreign Affairs, Office of Protocol (DFA-OP), requesting for a BIR ruling on the Value-Added Tax (VAT) exemption privilege for the Embassy of the Socialist Republic of Vietnam 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, 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. As per the Indorsement of the DFA-OP dated 05 February 2020, and the DFA Matrix of VAT Privileges Enjoyed by the Philippine Foreign Service Posts dated 06 February 2020, the Philippine Embassy in Hanoi enjoys VAT exemption privilege limited to electricity bill of the Chancery through reimbursement on a quarterly basis . There is no minimum amount requirement to avail of tax exemption. Based on the foregoing, this Office is of the opinion as it hereby rules that, applying the principle of reciprocity, and pursuant to Revenue Memorandum Order (RMO) No. 10-2019, the Embassy of the Socialist Republic of Vietnam is entitled to the same VAT exemption privilege through reimbursement/refund , and not through point-of-sale basis. Accordingly, the Embassy of the Socialist Republic of Vietnam, upon the expiration of its VAT Certificate, may proceed to secure the necessary VAT reimbursement/refund on the electricity bill of the Chancery following the guidelines set forth in RMO No. 10-2019. Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue