Embassy of the Kingdom of Belgium

October 14, 2019 ITAD BIR RULING NO. 029-19 Principle of Reciprocity; Revenue Memorandum Order No. 10-2019 Embassy of the Kingdom of Belgium 9th Floor, Multinational Bancorporation Center 6805 Ayala Avenue 1200 Makati City Gentlemen : This refers to your requests, indorsed by the Department of Foreign Affairs, Office of Protocol (DFA-OP), for the renewal of the Value-Added Tax Exemption Certificate (VEC) 1 of your diplomatic personnel on local purchase of goods and services for their personal use. IAETDc In reply, please be informed that while the Vienna Convention on Diplomatic Relations of 1961 exempts diplomatic missions ( i.e. , embassies and consulates) and 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 local purchases of goods and services, provided that they can submit to the Commissioner of Internal Revenue proof that the government of the concerned embassy allows similar tax privileges to the Philippine Foreign Service Post and its personnel on purchases of goods or services in their country. As per the Indorsement of the DFA-OP dated 03 July 2019, and the DFA Matrix on VAT Privileges Enjoyed by the Philippine Foreign Service Posts dated 05 April 2019, the Philippine Embassy, its diplomatic and non-diplomatic personnel in Brussels, Belgium enjoy VAT exemption privileges on purchase of goods, services and utilities through reimbursement/refund , subject to the following limitations: 1. The minimum amount of purchase per invoice/receipt: a. For the Embassy 125.00 (based on prevailing BSP exchange rate) ; b. For the diplomatic and non-diplomatic personnel the minimum amount of purchase per invoice 50.00 (based on prevailing BSP exchange rate) . 2. See attached Annex A on the list of transactions which DO NOT benefit from VAT exemption in Brussels. 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 Kingdom of Belgium, 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 Embassy of the Kingdom of Belgium 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 Embassy of the Kingdom of Belgium, 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. 2019-066 , duly issued on 18 February 2019, and valid until 06 February 2020 .