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July 26, 2018DA ITAD BIR RULING NO. 030-18Principle of Reciprocity;BIR Ruling No. ITAD-053-14Embassy of the United States of America1201 Roxas BoulevardManila, Philippines 1000Attention: AAA_______________Gentlemen :This has reference to your Note No. 1390 dated July 2, 2018 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 two (2) units of motor vehicles for the official use of the Embassy of the United States of America, specifically described as follows: HSAcaE Make and ModelModel YearChassis NumberMotor/Engine No.ColorToyota Innova 2.8 VDiesel A/T2018PA2AA3EM7H00311261GD0338410BlackishRedToyota Innova 2.8 VDiesel A/T2018PA2AA3EM1H00311401GD0338507AluminaJade 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...