ITAD Ruling No. 108-04

September 22, 2004 ITAD RULING NO. 108-04 Sec 106 & 108 of the National Internal Revenue Code of 1997; Article 34, Vienna Convention BIR Ruling No. 206-93 Embassy of Singapore 35/f Tower I, Enterprise Center 6766 Ayala Ave. corner Paseo de Roxas Makati City Attention: Mr . Adrian Chan Gek Chong First Secretary Gentlemen : This has reference to your letter dated May 12, 2004 referred to this Office by the Department of Foreign Affairs and the Department of Finance (DFA), requesting for the exemption from payment of taxes (VAT) on a locally-purchased motor vehicle for the personal use of Mr. Adrian Chan Gek Chong, First Secretary of the Embassy of Singapore, specifically described as follows: Make: Mitsubishi L400 Spacegear AT Model Year: 2003 Color: Silver/Gray Production Number: 008792 Engine Number: 4G64A033419 Service Number: W5036661 Conduction Sticker No.: BA 4602 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 goods or services; "xxx xxx xxx" the tax exemption privilege of an Embassy and its diplomatic agents does not include exemption from the value-added tax (VAT) 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 and 108, both of the National Internal Revenue Code of 1997. However, applying the principle of reciprocity, this Office may grant exemptions to the Embassy of Singapore or its personnel on their local purchases of goods and/or services it appearing from the list submitted by the Department of Foreign Affairs as of October 29, 2004 that your Government allows similar exemption to Philippine Embassy personnel on their purchases of goods and services in your country. Hence, the sale of one (1) Mitsubishi L400 Spacegear AT, for the personal use of Mr. Adrian Chan Gek Chong, First Secretary of the Embassy of Singapore is exempt from VAT. (BIR Ruling No. 206-93 dated May 11, 1993) This ruling is issued on the basis of the facts as represented and is rendered only for the purpose of determining whether Mr. Adrian Chan Gek Chong, First Secretary of the Embassy of Singapore is entitled to the benefits of the principle of reciprocity. The determination on whether your request for tax refund should be given due course is upon the Office which will be conducting the investigation for that purpose. Thus, the docket pertaining thereto (including a copy of this ruling) shall be indorsed to that for processing and investigation. CaHcET Very truly yours, (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service