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March 4, 2020DA ITAD BIR RULING NO. 007-20Principle of Reciprocity; BIR Ruling No. ITAD-313-11Embassy of Japan2627 Roxas BoulevardPasay City Gentlemen :This has reference to your Note No. 102-20 dated February 6, 2020 referred to this Office by the Department of Finance and the Department of Foreign Affairs (DFA), requesting for the exemption from the payment of value-added (VAT) and ad valorem taxes on the local purchase of a motor vehicle for official use of the Embassy of Japan, specifically described as follows: HTcADC Type of Use:OfficialMake:Toyota Hiace GL Grandia 2.8L DSL ATModel Year:2020Color:Luxury Pearl ToningFrame Number:JTFPA9AP5K8012703Engine Number:1GD8468254 In reply, please be informed that Article 34 of the Vienna Convention on Diplomatic Relations reads:"ARTICLE 34A 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"Thus, the tax exemption privilege of an Embassy and its diplomatic agents does not include exemption from VAT and ad valorem tax, which are indirect...