ITAD Ruling No. 149-02

August 23, 2002 ITAD RULING NO. 149-02 Sec. 106 & 149 of the Tax Code 1997 BIR Ruling No. ITAD-39-02 United Nations High Commissioner for Refugees Jaka II Building, 2nd Floor, 150 Legaspi St. Makati City Gentlemen : This refers to your later dated July 17, 2002, which was received by this Office on August 13, 2002, requesting for the tax-free local purchase of one (1) unit Honda Accord 2.0 VTi-L A/T for the official use of the United Nations High Commissioner for Refugees (UNHCR), specifically described as follows: Make: Honda Accord 2.0 VTi-L A/T (4 door sedan, gas, 2.0li, VTEC, 4-speed automatic transmission, 152 hp) Model year: 2002 Color: Titanium Silver Metallic Chassis Number: PALP56-1300968 Engine Number: PADCF96601V300166 In reply, please be informed that Article V, Section 18 of the Convention on the Privileges and Immunities of the United Nations which the Republic the Philippines granted in 1947 stated the following: "ARTICLE V Officials" "Section 18. Officials of the United Nations shall: "xxx xxx xxx "e) be accorded the same privileges in respect of exchange facilities as are accorded to the officials of comparable ranks forming part of diplomatic missions to the government concerned; "xxx xxx xxx" "g) have the right to import free of duty their furniture and effects at the time of first taking up their post in the country in question." It is evident that the intention of the foregoing provisions is to place the officers of the UNHCR at par with the officers of other international organizations insofar as exemption from taxes is concerned. One such organization is the Asian Development Bank whose officers are granted exemption from value-added tax (VAT) and ad valorem tax on their local purchase of motor vehicles pursuant to Memorandum of the Executive Secretary to the Secretary of Foreign Affairs and Secretary of Finance dated August 15, 1973 as implemented by Department Order No. 43-89. ( BIR Ruling No. ITAD-39-02 dated April 5, 2002 ) Accordingly, on the basis of the favorable recommendation of the Department of Foreign Affairs and in line with the precedent rulings granting VAT and ad valorem tax exemption to ADB personnel and members of diplomatic missions on their local purchase of motor vehicle, your request on behalf of Mr. Maechubot, Head of United Nations High Commissioner for Refugees, for exemption from VAT and ad valorem tax imposed under, Sections 106(A) and 149 of the 1997 Tax Code on his purchase of one (1) Unit Honda Accord 2.0 VTi-L A/T is hereby granted. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service