ITAD Ruling No. 051-99

December 23, 1999 ITAD RULING NO. 051-99 Sec. 106 Sec. 108 ITAD #3-99 333-92 Royal Thai Embassy 107 Rada Street, Legaspi Village, Makati City Attention: Ms . Aurapin Leelitham Second Secretary Gentlemen : This refers to your letter dated December 3, 1999 requesting for a tax-free local purchase of one (1) unit 1999 HONDA CRV 2.0 A/T Model, 5 door sedan, gas, 2.0li, PGM-FI, 4-speed automatic transmission, 150 hp, Engine No. PEWD7-P204722, PADRD 1830XV104727, color heather mist silver for the personal use of Ms. Aurapin Leetlitham, Second Secretary of the Royal Thai Embassy. LibLex 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) and ad valorem tax on its local purchases of vehicles. In other words, purchases by that Embassy of vehicles shall be subject to the value added tax prescribed under Sections 106 and 108, and ad valorem tax under Section 149, both of the National Internal Revenue Code of 1997. However, under the principle of reciprocity, this Office may grant exemption to the Royal Thai Embassy 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 the Philippine Embassy and its personnel on their purchase of goods and services in your country. Hence, the local purchase of one (1) unit HONDA CRV 2.0 A/T Model, for the personal use of Ms. Aurapin Leetlitham of the Royal Thai Embassy is exempt from VAT and ad valorem taxes. (ITAD Ruling 3-99 dated July 8, 1999; BIR Ruling 333-92 dated October 27, 1992) LibLex Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal and Enforcement Group