ITAD Ruling No. 183-00

December 7, 2000 ITAD RULING NO. 183-00 Sec. 106 Sec. 108, Sec. 149 BIR Ruling No. 333-99 BIR Ruling No. ITAD-172-00 Embassy of the Republic of Korea 10TH Floor, The Pacific Star Building, Makati Avenue, Makati City Attention: Mr . Eun-sup NA Consul Gentlemen : This refers to your Note No. KPH 2000-205 dated September 21, 2000, referred to this Office by the Department of Foreign Affairs (DFA), requesting for an exemption from payment of value-added tax (VAT) and ad valorem tax on a local purchase of one (1) unit Honda Accord 2.3 VTi for the personal use of Mr. Eun-sup NA of the Embassy of the Republic of Korea specifically described as follows: Make: Honda Accord 2.3 VTi-L A/T (1,587 cc., 5-Sp Manual transmission, gasoline) Model Year: 2000 Color: Taffeta White Frame Number: PADCG5650YV200635 Engine Number: PAHPS-Y200648 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 DHcSIT "xxx xxx xxx" the tax exemption privilege of an Embassy and its diplomatic agents does not include exemption from value added tax (VAT) and ad valorem taxes 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, and ad valorem tax under Section 149, all of the National Internal Revenue Code of 1997. However, applying the principle of reciprocity, this Office may grant exemption to the Embassy. of the Republic of Korea and its personnel on their local purchases of goods and/or services it appearing from the list submitted by the Department of Foreign Affairs that your Government allows similar exemption to Philippine Embassy personnel on their purchase of goods and services in your country. IcDCaT Hence, the local purchase of one (1) Honda Accord 2.3 VTi-LA A/T Model 2000, for the personal use of Mr. Eun-sup NA is exempt from VAT and ad valorem taxes based on reciprocity. (BIR Ruling No. ITAD-172-00 dated November 10, 2000) Very truly yours, Commissioner of Internal Revenue By: (SGD.) LILIAN B. HEFTI Deputy Commissioner Legal & Inspection Group