Royal Norwegian Embassy

September 6, 2019 ITAD BIR RULING NO. 024-19 Principle of Reciprocity; Revenue Memorandum Order No. 10-2019 Royal Norwegian Embassy 12th Floor, Del Rosario Law Centre 21st Drive corner 20th Drive 1630 Taguig City Gentlemen : This refers to your request, indorsed by the Department of Foreign Affairs, Office of Protocol (DFA-OP), for the renewal of the Value-Added Tax Exemption Certificates (VEC) 1 of the Royal Norwegian Embassy and its diplomatic officials in connection with the local purchase of goods and services. ICHDca 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 31 July 2019, and the DFA Matrix on VAT Privileges Enjoyed by the Philippine Foreign Service Posts dated 18 July 2019, the Philippine Embassy, its diplomatic and non-diplomatic personnel in Oslo, Norway enjoy VAT exemption privileges on purchase of goods and services through reimbursement/refund , subject to the following limitations: 1. The minimum amount of purchase per invoice/receipt is NOK 1,500.00 inclusive of VAT (roughly Php8,100.00); 2. See attached Annex A on the list of transactions which VAT refund is allowed in Oslo. 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 Royal Norwegian Embassy, its diplomatic and non-diplomatic personnel in the Philippines are entitled to the same VAT exemption privileges through reimbursement/refund , and NOT through point-of-sale basis. Hence, the expired VAT Certificate of your diplomatic personnel shall not be renewed anymore. It is worthy to mention, however, that under the said RMO No. 10-2019, all holders of a valid and current VAT Exemption Certificate (VEC) may continue to use the same until the end of the validity period of their respective VECs. This Bureau notes that, to date, the Royal Norwegian Embassy still holds a valid VEC. 2 In this regard, the embassy may still enjoy point-of-purchase VAT exemption on its official purchase of goods and services until the expiration date of the said VEC. Accordingly, the diplomatic and non-diplomatic personnel of the Royal Norwegian Embassy, and the Embassy itself upon the expiration of its VAT Certificate, 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 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. 2. VEC No. 2018-612 , duly issued on 13 December 2018, and valid until 26 January 2020 .