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September 3, 2018DA ITAD BIR RULING NO. 037-18Principle of Reciprocity;BIR Ruling No. ITAD-315-11Embassy of the Kingdom of the Netherlands1257 Acacia Street Dasmariñas VillageMakati CityGentlemen :This has reference to your Note MAN/AZ/080 dated July 31, 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 a motor vehicle for the official use of the Embassy of the Kingdom of the Netherlands, specifically described as follows: HEITAD Type of Use:OfficialMake:Toyota Innova 2.0 G GAS ATModel Year:2018Color:BlackFrame Number:PA2GW8EM0J3153016Engine Number:1TRA485186 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...