ITAD BIR Ruling No. 100-12

February 20, 2012 ITAD BIR RULING NO. 100-12 Article 34, Vienna Convention on Diplomatic Relations Embassy of The Federal Republic of Nigeria 2211, Paraiso St. Dasmarias Village Makati, Metro Manila Gentlemen : This refers to the request for value-added tax (VAT) exemption on the local purchase of goods and services by the Embassy of The Federal Republic of Nigeria in Manila and its qualified embassy personnel. In this regard, please be informed that while Article 34 of the Vienna Convention on Diplomatic Relations of 1961 exempts 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. Nevertheless, under the principle of reciprocity, this Office may grant tax exemption to the embassy of a foreign state and to 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. As per the updated list of the Office of Protocol of the Department of Foreign Affairs indorsed to this Bureau on November 23, 2011, the Philippine Embassy and its diplomatic personnel in Abuja, Nigeria enjoy VAT exemption privileges on the local purchase of goods and services thereat. Accordingly, the Embassy of the Federal Republic of Nigeria in Manila is now included in the list of diplomatic missions and other entities entitled to VAT exemption in the Philippines on the basis of reciprocity. cDIHES This Office, therefore, is of the opinion as it hereby rules that the Embassy of the Federal Republic of Nigeria and its diplomatic personnel in Manila are exempt from VAT on the purchase of goods and services in the Philippines on the basis of reciprocity. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue