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September 16, 2019DA ITAD BIR RULING NO. 035-19Principle of Reciprocity;BIR Ruling No. ITAD-314-12The Royal Thai Embassy107 Thailand (Rada) StreetLegaspi Village, Makati CityGentlemen :This has reference to your Note No. 40001/593 dated August 19, 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 Royal Thai Embassy, specifically described as follows:  Type of Use:OfficialMake:Toyota HiAce GL Grandia 2.8L DSL AT 2T-ZG-006Model Year:2019Color:Luxury Pearl ToningFrame Number:JTFPA9APXK8008162Engine Number:1GD8464131 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,...