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July 25, 2018DA ITAD BIR RULING NO. 028-18Principle of Reciprocity;BIR Ruling No. ITAD-313-11Embassy of Japan2627 Roxas BoulevardPasay CityGentlemen :This has reference to your Note No. 328-18 dated June 21, 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 Japan, specifically described as follows: AaCTcI Type of Use:OfficialMake:Toyota Fortuner 2.4 4x2 G DSL ATModel Year:2018Color:Attitude BlackFrame Number:MHFJB8GS9J1552651Engine Number:2GDC356333 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 taxes, on their...