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April 25, 2019DA ITAD BIR RULING NO. 015-19Principle of Reciprocity;BIR Ruling No. ITAD-300-11Australian EmbassyLevel 23-Tower 2 RCBC Plaza6819 Ayala Avenue Makati City 1200Gentlemen :This has reference to your Note No. 171/19 dated March 29, 2019 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 the official use of the Australian Embassy, specifically described as follows:  Type of Use:OfficialMake:Toyota HiAce Super Grandia Leather 3.0 DSL ATModel Year:2019Color:White Pearl 2TFrame Number:JTFRT13P0K8033119Engine Number:1KD2846796 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,...