Embassy of Israel

December 23, 2021 ITAD BIR RULING NO. 049-21 Principle of Reciprocity Embassy of Israel 10/F Avechares Center 1132 University Parkway North Bonifacio Global City, 1634 Taguig City Gentlemen : This refers to the value-added tax (VAT) exemption on the local purchase of goods and services by the Embassy of Israel (the Embassy) in Manila and its qualified personnel. In this regard, please be informed that Article 23 of the Vienna Convention on Diplomatic Relations of 1961 (VCDR) exempts diplomatic missions from all national taxes in respect of the premises of the mission. Moreover, Article 34 of the same VCDR exempts diplomatic agents from all dues and taxes, personal or real, national, regional or municipal. However, diplomatic agents are subject to the indirect taxes of a kind which are normally incorporated in the price of goods or services, e.g. , VAT. On the basis of reciprocity, however, this Office may confirm the VAT exemption of the embassy of a foreign state and the members of diplomatic missions on their local purchases of goods and services, provided that they can submit to the Commissioner of Internal Revenue proof that the said foreign government allows similar tax exemptions to the Philippine Embassy or its personnel on their purchases of goods or services in that foreign country. Based on the latest Matrix on Value-Added Tax (VAT) Exemption Privileges enjoyed by the Philippine Foreign Service Posts provided by the Department of Foreign Affairs, updated as of November 12, 2021, the Philippine Embassy and its personnel in Tel Aviv enjoy VAT exemption privileges subject to the following limitations: FOR THE EMBASSY Refund of the VAT imposed on its official purchases of all goods, services (inclusive of utilities) and motor vehicle Point-of-sale VAT exemption on purchases of gasoline and fuel up to a maximum of 600 liters per month FOR THE DIPLOMATIC PERSONNEL Refund of the VAT imposed o on purchases of goods and services (inclusive of utilities) for his/her personal use, but only up to a maximum VAT amount of USD75 per quarter or USD300 per year, per family (based on prevailing BSP rate on the date of the refund process) o on local purchase of motor vehicle Point-of-sale VAT exemption on purchase of gas and fuel up to a maximum of 450 liters per month FOR THE NON-DIPLOMATIC PERSONNEL (ONLY WITHIN THE FIRST SIX (6) MONTHS UPON ARRIVAL) Refund of the VAT imposed : o on purchases of goods and services (inclusive of utilities) for his/her personal use, but only up to a maximum amount of USD150 (if single) and USD250 (per family) within six (6) months from the date of arrival o on local purchase of motor vehicle Point-of-sale VAT exemption on purchase of gas and fuel (150 liters per month) for his/her personal use Nevertheless, considering the effective and efficient tax reimbursement system of the Government of Israel, this Office hereby confirms the grant of point-of-sale VAT exemption for the Embassy on its official purchases of goods, services (inclusive of utilities), fuel and motor vehicle in the Philippines. On the other hand, except for the purchase of gas and fuel which is eligible for point-of-sale VAT exemption, the grant of VAT exemption privilege for all other purchases of the diplomatic and non-diplomatic personnel of the Embassy is by way of refund. Accordingly, they may proceed to secure the necessary VAT refund on personal purchase of goods, services (inclusive of utilities) and motor vehicle in the Philippines, subject to the foregoing limitations. This ruling CANCELS and SUPERSEDES BIR Ruling No. ITAD-129-16 issued on August 26, 2016. Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue