ITAD Ruling No. 156-02

September 10, 2002 ITAD RULING NO. 156-02 Sec. 106 & 149 of the Tax Code 1997 BIR Ruling No. ITAD-139-02 Delegation of the European Commission 7/F Salustiana D. Ty Tower, 104 Paseo de Roxas Legaspi Village, Makati City Attention: H.E. Jan De Kok Ambassador/Head of Delegation Gentlemen : This refers to your letter dated August 12, 2002 which was endorsed by the Department of Finance (DOF) dated August 21, 2002 and received by this Office dated September 5, 2002, requesting for exemption from payment of value added tax (VAT) on the local purchase of a motor vehicle for the personal use of H.E. Jan De Kok, Ambassador/Head of Delegation of the Delegation of the European Commission in the Philippines, of one (1) 2002 Honda CRV 2.0 A/T specifically described as follows: Make: Honda CRV 2.0 A/T Model year: 2002 Color: Satin Silver Metallic Chassis Number: PADRD 48302V001395 Engine Number: PRLD83-2001321 Cond. St. No.: 04 TYX 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 the goods and services; the tax exemption privilege of the officials of the Delegation of the European Commission does not include exemption from value added tax (VAT) on its local purchases of goods and services. In other words, purchases by its officials 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 VAT exemption to the officials of the Delegation of the European Commission on their 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 Philippine Embassy personnel on their purchase of goods and services in your country. Hence, the sale of one (1) Honda CRV 2.0 A/T, for the personal use H.E. Jan De Kok, Ambassador/Head of the Delegation of the Delegation of the European Commission is exempt from VAT. (BIR Ruling No. ITAD-139-02 dated August 8, 2002) caADSE Very truly yours, (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service