ITAD Ruling No. 001-99

June 24, 1999 ITAD RULING NO. 001-99 Sec. 106 Sec. 108 Embassy of the Federal Republic of Nigeria Metro Manila, Philippines Attention: Abdul M . Salisu Counsellor Gentlemen : This refers to your letter dated June 04, 1999 requesting for exemption from value added tax (VAT) on the purchase of one (1) unit locally purchased Honda CRV 2.0 M/T, 1999 Model (5 door sedan, gas, 2.0Li SOHC, PGM-FI, 5 speed manual transmission, 145 hp) with engine no. PEWD2-P100984 and chassis no. PADRD 1720WV000991 for the personal use of Mr. Abdul M. Salisu, Counsellor, Embassy of the Federal Republic of Nigeria. llcd In reply, please be informed that pursuant to Article 34 of the Vienna Convention on Diplomatic Relations, pertinent portion of which reads: "ARTICLE 34 "A diplomatic agent shall be exempt from all dues and taxes, personal or real, national, regional or municipal, except: "(a) indirect taxes of a kind which are normally incorporated in the price of the goods and services "xxx xxx xxx" the tax exemption privilege of an Embassy and its diplomatic agents does not include exemption from value added tax (VAT) on its local purchases of goods and services. In other words, purchases by that Embassy of goods and/or services shall be subject to the value added tax prescribed under Sections 106 and 108, both of the National Internal Revenue Code of 1997. However, under the principle of reciprocity, this Office may grant exemptions to the Embassy of the Federal Republic of Nigeria or its personnel on their local purchases of goods and/or services it appearing from the list submitted by the Department of Foreign Affairs that your Government allows similar exemption to Philippine Embassy personnel on their purchase of goods and services in your country. Hence, the local purchase of one (1) Honda CRV '99 2.0 LXi 5-dr Sedan, for the personal use of Mr. Abdul M. Salisu is thereby exempt from VAT. cdll Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal and Enforcement Group