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November 7, 2019DA ITAD BIR RULING NO. 041-19Principle of Reciprocity;BIR Ruling No. ITAD-313-11Embassy of Japan2627 Roxas Boulevard1300 Pasay City, PhilippinesGentlemen :This has reference to your Note No. 537-19 dated October 2, 2019 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 one (1) unit of motor vehicle for personal use of AAA, __________ of the Embassy of Japan, specifically described as follows: Type of use: PersonalMake and Model: Toyota RAV4Model Year: 2020Chassis Number: JMTZ13FV2KJ016304Motor/Engine No.: A25A5269182Color: White Pearl 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...