ITAD Ruling No. 070-02

April 26, 2002 ITAD RULING NO. 070-02 Section 109 (q) Tax Code VAT Ruling No. 008-98 Food & Agricultural Organization of the United Nations NEDA sa Makati Building 106 Amorsolo Street Legaspi Village, Makati City Attention: Mr. Sang Mu Lee FAO Representative Gentlemen : This refers to your letter dated December 5, 2001 endorsed to the Department of Foreign Affairs and subsequently forwarded to this Office for proper action regarding your request for exemption from the payment of ad valorem and value-added taxes on your locally purchased motor vehicle, a 2001 Honda Civic 1.6 VTI M/T with Chassis No. PADES 55401V001353 and Engine No. PSJDO-1001346. In reply, Section 109(q) of the Tax Code of 1997 provides: "Sec. 109. Exempt Transactions . The following shall be exempt from the value-added tax: xxx xxx xxx (q) Transactions which are exempt under international agreements to which the Philippines is a signatory or under special laws, except those under Presidential Decree Nos. 66, 529, and 1590; xxx xxx xxx" Such being the case and since the Philippines is a member of the United Nations and a signatory to the Convention on the Privileges and Immunities of the Specialized Agencies of the United Nations adopted by the General Assembly on 21 November 1947, the United Nations and its related organizations operating in the Philippines shall be exempt from the VAT on their importations and purchases of important movable and immovable properties for official use. ( VAT Ruling No. 008-98 ) Accordingly, the purchase of one (1) unit 2001 Honda Civic 1.6 VTI M/T with Chassis No. PADES 55401V001353 and Engine No. PSJDO-1001346 for the official use of the Food and Agriculture Organization, is exempt from value-added and ad valorem taxes. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service