Guidelines to be Observed in Appeals to the Court of Appeals and to the Supreme Court

August 11, 2003 ITAD RULING NO. 119-03 Sec 108 & 109 of the Tax Code 1997; Article 34, Vienna Convention BIR Ruling No. DA-ITAD-41-03 The Japan Foundation Manila Office 12th Floor, Pacific Star Building Gil Puyat Avenue corner Makati Avenue Makati City Gentlemen : This has reference to your Note No. 196-03 dated April 14, 2003 referred to this Office by the Department of Foreign Affairs and the Department of Finance, requesting for exemption from payment of value-added tax (VAT) and ad valorem taxes on the local purchase of a motor vehicle specifically described hereunder, for the official use of The Japan Foundation Manila Office: Make: Nissan Cefiro 2.0 V6 VIP Brougham A33 2.0 A/T Q 142 Model Year: 2003 Color: Raven Black Chassis Number: CLFULEAA33-A07991 Engine Number: VQ20-101179 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 goods or services, "xxx xxx xxx" the tax exemption privilege of an Embassy and its diplomatic agents does not include exemption from value-added tax (VAT) 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 taxes under Section 149, all of the National Internal Revenue Code of 1997. However, on the basis of the favorable recommendation of the Department of Foreign Affairs and the Department of Finance and in line with the precedent rulings granting VAT and ad valorem tax exemption to personnel and members of the diplomatic missions on the local purchase of motor vehicles, your request on behalf of The Japan Foundation Manila Office, for exemption from VAT and ad valorem taxes imposed under Sections 106(A) and 149 of the 1997 Tax Code on the purchase of one (1) unit Nissan Cefiro 2.0 V6 VIP Brougham is hereby granted. ( BIR Ruling No. DA-ITAD-41-03 dated February 28, 2003 ) This ruling replaces and revokes BIR Ruling No. DA-ITAD-85-03 dated June 23, 2003 which was not utilized in view of the sale of the subject motor vehicle to another buyer. cCSTHA Very truly yours, (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service