Embassy of the Republic of Indonesia

June 17, 2020 ITAD BIR RULING NO. 044-20 Principle of Reciprocity; Revenue Memorandum Order No. 10-2019 Embassy of the Republic of Indonesia 185 Salcedo Street Legaspi Village 1229 Makati City Gentlemen : This refers to your Note No. PK/0159/II/2020 dated 26 February 2020, indorsed by the Department of Foreign Affairs, Office of Protocol (DFA-OP), requesting for an amended ruling to reflect the new information received on the VAT exemption privileges accorded to the Philippine Embassy in Jakarta. 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 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 28 February 2020, the Philippine Embassy, its qualified personnel (including their dependents) in Jakarta, Indonesia, enjoy VAT exemption privileges through reimbursement/refund , subject to the following limitation: 1. Minimum amount required per single invoice is USD200 (more or less PhP10,115.00) ; 2. Exemption privileges is limited to the following goods and services: a. Consumable goods; b. Jewelries; c. Electronics; EATCcI d. Furniture; e. Fuel; f. Office supplies; g. Rental of real property (land, building or apartment) and its maintenance; h. Electricity; i. Telecommunication; j. Services of consultant or developer; k. Domestic airline ticket; and l. Hotel and restaurant. 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 Indonesia, its qualified diplomatic and non-diplomatic 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 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. This ruling CANCELS and SUPERSEDES BIR Ruling No. ITAD-036-19 issued on 17 October 2019. Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue