September 19, 2018
DA ITAD BIR RULING NO. 042-18
Principle of Reciprocity;
BIR Ruling No. ITAD-313-11
Embassy of Japan
2627 Roxas Boulevard
Pasay City
Gentlemen :
This has reference to your Note No. 445-18, 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 Japan, specifically described as follows: AaCTcI
Type of Use: | Official |
Make: | Honda Odyssey 2.4 EX CVT AT |
Model Year: | 2018 |
Color: | Crystal Black |
Frame Number: | JHMRC1830JC205569 |
Engine Number: | K24W72424232 |
In reply, please be informed that Article 34 of the Vienna Convention on Diplomatic Relations reads:
"ARTICLE 34
A 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 local purchase of goods and services....
