ITAD Ruling No. 056-00

March 7, 2000 ITAD RULING NO. 056-00 Section 106 Section 108 Section 149 ITAD 4-99 DA-177-99 British Embassy Manila, Philippines Attention: Mr . A R M Dent Management Officer Gentlemen : This refers to your Note No. 05-00 dated January 13, 2000 requesting for a tax free purchase of one (1) unit Honda CRV 2.0 A/T, 2000 Model with Engine No. PEWD7-P205144 and Chassis No. PADRD 183XV105141 for the personal use of Ms. Angela Trott Charpentier, Third Secretary Immigration of the British Embassy, Manila. LexLib In reply, please be informed that pursuant to Article 43 of the Vienna Convention On Diplomatic Relations, pertinent portions 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 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 (A) and 108 and ad valorem tax prescribed under Section 149 of the National Internal Revenue Code of 1997. However, under the principle of reciprocity, this Office may grant exemptions to the British 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 dated October 4, 1999 that your Government allows similar exemption to Philippine Embassy personnel on their purchase of goods and services in your country. ( ITAD No. 4-99 dated July 8, 1999) Hence, the local purchase of one (1) unit Honda CRV 2.0 A/T, 2000 Model for the personal use of Ms. Angela Trott Charpentier, Third Secretary Immigration of the British Embassy, Manila is exempt from value-added tax and ad valorem tax. Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal and Enforcement Group