Embassy of Canada

September 6, 2019 ITAD BIR RULING NO. 023-19 Principle of Reciprocity; Revenue Memorandum Order No. 10-2019 Embassy of Canada Level 6-8, RCBC Plaza, Tower II 1200 6819 Ayala Avenue 1227 Makati City Gentlemen : This refers to your Note No. 19-155 dated 16 July 2019, indorsed by the Department of Foreign Affairs, Office of Protocol (DFA-OP), requesting for the renewal of the Value-Added Tax Exemption Certificates (VEC) 1 of your diplomatic personnel in connection with the local purchase of goods and services for their personal use. caITAC 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 19 July 2019, and the DFA Matrix of VAT Privileges Enjoyed by the Philippine Foreign Service Posts dated 18 July 2019, the Philippine Embassy, its diplomatic and non-diplomatic personnel including the qualified dependents of the latter, enjoy VAT exemption privileges in Ottawa, Canada through reimbursement/refund . Based on the foregoing, this Office is of the opinion as it hereby rules that, applying the principle of reciprocity, the Embassy of Canada, its diplomatic and non-diplomatic personnel in the Philippines are entitled to VAT exemption privileges through reimbursement/refund , and not through point-of-sale basis. Hence, the expiring VAT Certificates of your embassy personnel shall not be renewed anymore. Accordingly, the Embassy of Canada, its diplomatic and non-diplomatic personnel including their legal dependents, may proceed to secure the necessary VAT reimbursement/refund on purchases of local goods and services in the Philippines following the guidelines set forth in Revenue Memorandum Order (RMO) No. 10-2019. Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue Footnotes 1. Now called, 'Value-Added Tax Certificate' (VC), under RMO No. 10-2019.