Embassy of the Republic of Indonesia

July 23, 2021 ITAD BIR RULING NO. 037-21 Principle of Reciprocity; RMO No. 10-2019, as amended by RMO No. 41-2020 Embassy of the Republic of Indonesia 185 Salcedo Street Legaspi Village 1229 Makati City Gentlemen : This refers to your Note No. PK/201/VI/2021 dated 28 June 2021, indorsed by the Department of Foreign Affairs, Office of Protocol (DFA-OP), requesting for any amended ruling on the exemption of the Embassy of the Republic of Indonesia, its qualified personnel and the latter's dependents from value-added tax (VAT) on the local purchase of goods and services. 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, on the basis 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 a 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 07 July 2021, the Philippine Embassy, its qualified personnel (including their dependents) in Jakarta, Indonesia, enjoy VAT exemption privileges on local purchase of all goods and services by way of reimbursement/refund , subject to a minimum purchase amounting to PHP__________ in a single invoice/receipt, exclusive of VAT . 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, as amended by RMO No. 41-2020, the Embassy of Indonesia, its qualified personnel in the Philippines including their dependents are entitled to the same VAT exemption privileges through reimbursement/refund , and not through point-of-sale basis. Accordingly, the Embassy of Indonesia, its diplomatic and non-diplomatic personnel, may proceed to secure the necessary VAT reimbursement/refund on their purchases of all local goods and services in the Philippines subject only to the aforementioned limitation, and following the guidelines set forth in RMO No. 10-2019, as amended by RMO No. 41-2020. IDSEAH This ruling CANCELS and SUPERSEDES BIR Ruling No. ITAD-006-21 issued on 04 March 2021. Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue