ITAD Ruling No. 039-02

April 5, 2002 ITAD RULING NO. 039-02 Sec 106 & 149 of the Tax Code 1997 BIR Ruling No. ITAD-115-00 United Nations High Commissioner for Refugees Jaka II Building, 2nd Floor, 150 Legaspi St. Makati City Attention: Thamrongsak Meechubot Head of Office UNHCR Liaison Office Gentlemen : This refers to your letter dated March 13, 2002 which was referred to this Office by the Department of Finance (DOF) requesting for the tax free local purchase of one (1) unit Honda Civic 1.6 M/T Model 2001, with Chassis No. PADES55401V001515 and Engine No. PSJDO-1001520 for the personal use of Mr. Thamrongsak Meechubot, Head of United Nations High Commissioner for Refugees (UNHCR). In reply, please be informed that Article V, Section 18 of the Convention on the Privileges and Immunities of the United Nations which the Republic of the Philippines acceded in 1947 stated the following: "ARTICLE V Officials" "Section 18. Officials of the United Nations shall : "xxx xxx xxx" "e) be accorded the same privileges in respect of exchange facilities as are accorded to the officials of comparable ranks forming part of diplomatic missions to the government concerned; "xxx xxx xxx" "g) have the right to import free of duty their furniture and effects at the time of first taking up their post in the country in question." It is evident that the intention of the foregoing provisions is to place the officers of the UNHCR at par with the officers of other international organizations insofar as exemption from taxes is concerned. One such organization is the Asian Development Bank whose officers are granted exemption from value-added tax (VAT) and ad valorem tax on their local purchase of motor vehicles pursuant to Memorandum of the Executive Secretary to the Secretary of Foreign Affairs and Secretary of Finance dated August 15, 1973 as implemented by Department Order No. 43-89. (BIR Ruling No. ITAD-115-00 dated August 29, 2000) Accordingly, on the basis of the favorable recommendation of the Department of Foreign Affairs and in line with the precedent rulings granting VAT and ad valorem tax exemption to ADB personnel and members of diplomatic missions on their local purchase of motor vehicles, your request on behalf of Mr. Meechubot, Head of United Nations High Commissioner for Refugees, for exemption from VAT and ad valorem tax imposed under Sections 106(A) and 149 of the 1997 Tax Code on his purchase of one (1) unit Ford Expedition is hereby granted. Very truly yours, (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service