Her Britannic Majesty's Embassy

October 20, 2020 ITAD BIR RULING NO. 065-20 Principle of Reciprocity; Revenue Memorandum Order No. 10-2019 Her Britannic Majesty's Embassy 120 Upper McKinley Road Taguig City 1630 Manila Gentlemen : This refers to the request for a ruling on the value-added tax (VAT) exemption on the local purchase of goods and services of Her Britannic Majesty's Embassy and its personnel which was received by this Bureau on 18 August 2020 through 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 mission ( 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). However, under the principle of reciprocity, this Bureau may grant tax privileges to a foreign embassy and 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 23 July 2019, and the DFA Matrix on VAT Privileges Enjoyed by the Philippine Foreign Service Posts as of 20 August 2020, the Philippine Embassy, its diplomatic and non-diplomatic personnel in London, United Kingdom enjoy VAT exemption privileges, through reimbursement/refund , only on the purchase of the following: FOR THE EMBASSY 1. Petrol, diesel and heating oil; 2. Alcoholic liquor and tobacco from excise warehouses; and CAIHTE 3. High-grade manufactured furniture and furnishings for the residence of the Head of Mission or for the reception rooms of the Embassy in excess of 1,000.00 (based on prevailing BSP exchange rate) . FOR THE DIPLOMATIC AND NON-DIPLOMATIC PERSONNEL 1. Petrol, diesel and heating oil. Based on the foregoing, this Bureau is of the opinion as it hereby rules that applying the principle of reciprocity, and pursuant to Revenue Memorandum Order (RMO) No. 10-2019, Her Britannic Majesty's Embassy, 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. Accordingly, Her Britannic Majesty's Embassy, its diplomatic and non-diplomatic personnel, may proceed to secure the necessary VAT reimbursement/refund on purchases in the Philippines limited only on the aforementioned goods, and following the guidelines set forth in RMO No. 10-2019. Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue