ITAD Ruling No. 111-05

September 26, 2005 ITAD RULING NO. 111-05 Sec. 106 & 108 of the Tax Code of 1997 VAT Ruling No. 008-00 Royal Thai Embassy 107 Rada St., Legaspi Village Makati City Gentlemen : This has reference to your Note Verbale No. 40001/132 dated February 24, 2004 referred to this Office by the Department of Finance (DOF) and the Department of Foreign Affairs (DFA),requesting for a refund of value-added tax (VAT) on the local purchase of a motor vehicle, for the official use of the Royal Thai Embassy, specifically described as follows: Type of Use: Official Make: Chevrolet Venture LT, Mini-Van A/T Model Year: 2003 Chassis Number: LSGDC82C53S184721 Engine Number: LW9-30714229 Date Purchased: October 27, 2003 (per Sales invoice issued by Makati Heidelberg Motors Corp. In reply, please be advised that 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 of the National Internal Revenue Code of 1997. However, applying the principle of reciprocity, this Office may grant VAT exemption to the Royal Thai Embassy on its local purchases of goods and/or services it appearing from the list submitted by the Department of Foreign Affairs as of September 4, 2001, that your Government allows similar exemption to the Philippine Embassy on their purchases of goods and services in your country. Hence, the local purchase of one (1) unit of 2003 Chevrolet Venture LT Mini Van A/T, for the official use of the Royal Thai Embassy is exempt from VAT. (VAT Ruling No. 008-00 dated February 7, 2003) ISTDAH This ruling is issued on the basis of the facts as represented and is rendered only for the purpose of determining whether the Royal Thai Embassy is entitled to VAT exemption on the basis 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 endorsed to the proper Office for processing and investigation. Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service