VAT Ruling No. 025-93

April 30, 1993 VAT RULING NO. 025-93 Reciprocity 000-00 025-93 Sapphire Cargo Movers, Inc. 3rd Floor, Evekal Bldg. 855 Pasay Road, Makati Metro Manila, Philippines Attention: Ernesto S . Levanza President Gentlemen : This refers to your letter to the Secretary of Finance dated October 27, 1992 which was referred to this Office for a ruling whether or not the local purchase by United States Assistance for International Development (USAID) of One (1) Unit Brand new Hyster Lift Truck "Challenger Model H4.00XL.5" complete with accessories with the total domestic invoice value of P900,000.00, is exempt from value-added tax. cdpr In reply, please be informed that under Article 36 of the Vienna Convention on Diplomatic Relations adopted on April 18, 1961 and quoted hereunder for reference, viz: Article 36 ""1. The receiving State, shall, in accordance with such laws and regulations as it may adopt, permit entry of and grant exemption from all customs duties, taxes, and related charges other than charges for storage, cottage and similar services; on "a) articles for the official use of the mission; "b) articles for the personal use of a diplomatic agent or members of his family forming part of his household, including articles intended for his establishment." articles for the official use of the mission may be granted exemption from internal revenue taxes. It appears that USAID forms part of the official mission operating directly under the Embassy of the United States of America- a country which appears to grant the same reciprocal treatment to similar purchases of the Philippine embassy in said country. Accordingly, having complied with the requirements prescribed under Revenue Regulations No. 10-89 and pursuant to the principle of reciprocity, its request for exemption from VAT on its local purchase of the said vehicle is hereby granted. cdll Very truly yours, VICTOR A. DEOFERIO, JR. Deputy Commissioner (Officer-in-Charge)