ITAD Ruling No. 013-99

July 28, 1999 ITAD RULING NO. 013-99 Section 106 Section 108 206-93 The People's Bureau of the Great Socialist People's Libyan Arab Jamahiriya Makati City, Philippines Gentlemen : This refers to your Note No. 043-97 dated September 12, 1997, which was referred to this Office by the Department of Foreign Affairs requesting for the issuance of a Tax Exemption Certificate for the official use of your Office. prcd 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 purchase of goods and services. In other words, purchase by the Peoples Bureau of the Great Socialist Peoples Libyan Arab Jamahiriya of goods and/or services shall be subject to the value-added tax prescribed under Section 106 and 108, both of the National Internal Revenue Code of 1997. However, under the principle of reciprocity, this Office may grant tax exemption to the embassy of a foreign state or its personnel on their local purchase 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 (BIR Ruling 206-93 dated May 11, 1993). Hence, the Peoples Bureau of the Great Socialist Peoples Libyan Arab Jamahiriya is entitled to VAT exemptions on their local purchases of goods and/or services. Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal and Enforcement Group