Royal Thai Embassy

October 26, 2020 ITAD BIR RULING NO. 068-20 Principle of Reciprocity; Revenue Memorandum Order No. 10-2019 Royal Thai Embassy 107 Rada Street, Legaspi Village 1229 Makati City Gentlemen : This refers to Note Verbale dated 21 September 2020, indorsed by the Department of Foreign Affairs, Office of Protocol (DFA-OP), requesting for the amendment of BIR Ruling No. ITAD-004-20, to include gasoline in the items that do not have minimum amount of purchase per transaction. 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 nevertheless subject to the indirect taxes of a kind which are normally incorporated in the price of goods or services ( e.g. , VAT). However, 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 allows similar tax privileges to the Philippine Embassy or its personnel on their respective purchases of goods or services in the concerned country. As per the Indorsement of the DFA-OP dated 25 September 2020, and the DFA Matrix of VAT Privileges Enjoyed by the Philippine Foreign Service Posts dated 17 September 2020, the Philippine Embassy in Bangkok, Thailand enjoys VAT exemption privileges through reimbursement/refund , subject to the following conditions: The minimum amount of purchase per transaction is THB5,000 (approximately Php8,000, excluding VAT) . VAT exemption applies to electricity, tap water, telephone services and fuel regardless of the amount. Based on the foregoing, this Office is of the opinion as it hereby rules that, applying the principle of reciprocity, the Royal Thai Embassy in the Philippines is entitled to the same VAT exemption privileges through reimbursement/refund . Accordingly, the Royal Thai Embassy 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 Revenue Memorandum Order (RMO) No. 10-2019. AIDSTE This ruling modifies and amends BIR Ruling No. ITAD-004-20 dated 03 January 2020. Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue