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June 8, 2018DA ITAD BIR RULING NO. 022-18Principle of Reciprocity;BIR Ruling No. ITAD-294-11Embassy of the Republic of Indonesia185 Salcedo St. Legaspi VillageMakati CityGentlemen :This has reference to your Note No. PK/0635/V/2018 dated May 9, 2018 referred to this Office by the Department of Finance and the Department of Foreign Affairs, 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 Embassy of the Republic of Indonesia, specifically described as follows: ACIEaH Type of Use:OfficialMake:Toyota HiAce Super Grandia LXV 3.0 ATModel Year:2018Color:White PearlFrame Number:JTFST23P8J0036225Engine Number:1KD2796131 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 on its...