Amendments to Sec. 7(a) and (d) and Section 8 (a) and (b), Rule 141, Rules of Court As Amended

August 9, 2002 ITAD RULING NO. 140-02 Sec. 108 & 109 of the Tax Code 1997; Article 34, Vienna Convention BIR Ruling No. 206-93 Embassy of Switzerland 18th Floor, Globalbank Center 777 Paseo de Roxas P.O. Box 2068 MCPO 1260 Makati City Gentlemen : This has reference to your letter dated June 26, 2002 referred to this Office by the Department of Foreign Affairs (DFA), requesting for exemption from payment of value added tax (VAT) on the local purchase of a motorcycle by the Embassy of Switzerland of one (1) Honda NF110 (Wave) Motorcycle specifically described as follows: Type of use: Official Owner: Embassy of Switzerland Address: 24/F Equitable Bank Tower 8751 Paseo de Roxas, Makati City Make & Model: Honda NF 110(Wave) Motorcycle In reply, please be informed that pursuant to Article 34 of the Vienna Convention 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; "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, all of the National Internal Revenue Code of 1997. However, applying the principle of reciprocity, this office may grant VAT exemption to the Australian Embassy or its personnel 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 NF110 (Wave) Motorcycle, for the official use the Embassy of Switzerland is exempt from VAT. ( BIR Ruling No. 206-93 dated May 11, 1993 ) Very truly yours, (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service