Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, as Amended by Republic Act No. 10022

March 4, 2013 DA ITAD BIR RULING NO. 011-13 Secs. 106 & 108 of the NIRC of 1997, as amended; Article 34, Vienna Convention on Diplomatic Relations; BIR Ruling No. ITAD-294-11 Embassy of the Republic of Indonesia 185 Salcedo St. Legaspi Village Makati City Gentlemen : This has reference to your Note No. PK/0183-B/II/2013 dated February 4, 2013 referred to this Office by the Department of Finance (DOF) and the Department of Foreign Affairs (DFA), requesting for the exemption from the payment of value-added taxes (VAT) on the local purchase of a motor vehicle for the official use of the Embassy the Republic of Indonesia, specifically described as follows: Type of Use: Official Make: Hyundai Grand Starex TCI GL MT Model Year: 2012 Color: Hyper Metallic Frame Number: KMHWG81HACU498393 Engine Number: D4BHC025139 In reply, please be informed that Article 34 of the Vienna Convention on Diplomatic Relations 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; ESTDcC xxx xxx xxx" Thus, the tax exemption privilege of an Embassy and its diplomatic agents does not include exemption from VAT on its local purchases of goods and services. In other words, purchases by that Embassy of goods and/or services shall, in general, be subject to the VAT prescribed under Sections 106 and 108 of the National Internal Revenue Code of 1997, as amended. However, applying the principle of reciprocity, this Office may confirm exemption of the Embassy of the Republic of Indonesia and/or its personnel on their local purchase of motor vehicles it appearing from the list submitted by the DFA dated October 8, 2012 that the Government of the Republic of Indonesia allows similar exemption to the Philippine Embassy and/or its personnel on their purchase of motor vehicles in Indonesia. Hence, the local purchase of one (1) unit of 2012 Hyundai Grand Starex TCI GL MT for the official use of the Embassy of the Republic of Indonesia is exempt from VAT. (BIR Ruling No. ITAD-294-11 dated November 23, 2011) As for the sale made by a VAT-registered business establishment to the qualified foreign embassy, it shall enjoy the benefit of zero percent (0%) VAT pursuant to Revenue Memorandum Order No. 22-2004. This ruling is issued on the basis of the facts as represented. However, if upon investigation it shall be disclosed that the actual facts are different, then this ruling shall be without force and effect insofar as the herein parties are concerned. Very truly yours, (SGD.) ESTELA V. SALES Deputy Commissioner Legal and Inspection Group