Embassy of Argentine Republic

October 17, 2019 ITAD BIR RULING NO. 037-19 Principle of Reciprocity; Revenue Memorandum Order No. 10-2019 Embassy of Argentine Republic 104, 8th Floor Liberty Center H.V. De la Costa Street, Salcedo Village 1227 Makati 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 Certificate (VEC) of your diplomatic personnel on local purchase of goods and services for their personal use. HSCATc 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 their members on their 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 12 September 2019, and the DFA Matrix on VAT Privileges Enjoyed by the Philippine Foreign Service Posts dated 18 September 2019, the Philippine Embassy, its diplomatic and non-diplomatic personnel in Buenos Aires, Argentina enjoy VAT exemption privileges on purchase of goods and services (including utilities) through reimbursement/refund , subject to the following limitations: 1. Tax exemption privilege DOES NOT COVER the following: a. Medicines; b. Legal and notarial services; c. Property Rental; d. Passenger Transport; e. Books; and f. Municipal fee. 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 Argentine Republic, 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 Certificates 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 Argentine Republic still holds a valid VEC. 1 Hence, the embassy may still enjoy point-of-purchase VAT exemption until the expiration date of the said VEC. Accordingly, your diplomatic and non-diplomatic personnel, 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. VEC No. 2019-061 , duly issued on 11 February 2019, and valid until 09 February 2020 .