Embassy of the Holy See (Apostolic Nunciature)

October 25, 2021 ITAD BIR RULING NO. 045-21 Principle of Reciprocity; RMO No. 10-2019 as amended by RMO No. 41-2020 Embassy of the Holy See (Apostolic Nunciature) 2140 Taft Avenue, Malate 1004 Manila Gentlemen : This refers to the request for Value-Added Tax (VAT) exemption on the local purchase of goods and services of the Embassy of the Holy See (Apostolic Nunciature) as referred to this Office by the Department of Foreign Affairs, Office of Protocol (DFA-OP). 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, this Office may grant tax privileges to a foreign embassy and to its members on their local purchases of goods and services on the basis of reciprocity, provided that they can submit to the Commissioner of Internal Revenue a proof that their home country likewise grants similar tax privileges to the Philippine Embassy and/or its personnel on their purchases of goods or services therein. As per the DFA-OP VAT Matrix of August 27, 2021 and Indorsement dated August 6, 2020, the Philippine Embassy and its diplomatic personnel in the Vatican enjoy VAT exemption privileges on their purchases of goods, services and utilities on reimbursement/refund basis subject to the minimum amount of three hundred euros (300.00). Based on the foregoing, this Office is of the opinion as it hereby rules that, applying the principle of reciprocity, the Embassy of the Holy See (Apostolic Nunciature) and its diplomatic personnel are entitled to the same VAT exemption privileges on reimbursement/refund basis , and not at point-of-sale. Accordingly, the Embassy of the Holy See (Apostolic Nunciature) may proceed to secure the necessary VAT reimbursement/refund on its local purchases of goods and services in the Philippines subject only to the aforementioned limitation, and following the guidelines set forth in Revenue Memorandum Order (RMO) No. 10-2019, as amended by RMO No. 41-2020. Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue