ITAD Ruling No. 132-02

August 2, 2002 ITAD RULING NO. 132-02 Art. 109 (q) Tax Code Art. 2, Agreement Between the Rep. of the Phils. & Intergovernmental Committee for Migration DA-ITAD No. 70-02 International Organization For Migration Regional Office for East and Southeast Asia Units G & H, 25th Floor Citibank Tower Condominium Paseo de Roxas, Makati City Attention: Zlatko Zigic Deputy Chief of Mission Regional Office for East And Southeast Asia Gentlemen : This refers to your letter dated October 25, 2001, requesting exemption from Value-added tax on your purchase of computer hardware equipment with the Integrated Computer Systems, Inc. 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" Records show that the Republic of the Philippines entered into an agreement with the Intergovernmental Committee for Migration, now, International Organization For Migration (IOM), relevant provision of which states that: "Article 2 1. Unless otherwise provided in this Agreement, the Committee, including its property, funds and assets, shall enjoy in the Philippines the same privileges and immunities as those granted to specialized agencies of the United Nations by virtue of the Convention on the privileges and immunities of the specialized agencies of 21 November 1947 and of Philippine laws and regulations, governmental decrees and ministerial instructions pertaining to this matter." Records further show that the purpose and functions of the IOM, including the activities that it carries out with its staff, warrant that the Republic of the Philippines grants the same privileges and immunities identical to those accorded to the specialized agencies of the United Nations and their staff. Such being the case and since the Republic of the Philippines grants the specialized agencies of the United Nations and its related organizations operating in the Philippines exemption from value-added tax on their importations and purchases of important movable and immovable properties for official use, this Office is of the opinion and so holds that IOM is also exempt from value-added tax on its purchase of computer hardware equipment from Integrated Computer System, Inc. ( BIR Ruling DA-ITAD No. 10-02 dated April 26, 2002 ) This ruling is issued on the basis of the facts as represented. However, if upon investigation it shall be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service