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December 16, 2019DA ITAD BIR RULING NO. 049-19Principle of Reciprocity;BIR Ruling No. ITAD-313-11Embassy of Japan2627 Roxas BoulevardPasay CityGentlemen :This has reference to your Note No. 602-19 dated November 15, 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 official use of the Embassy of Japan, specifically described as follows: Type of Use:OfficialMake:Toyota Camry 2.5 G A/TModel Year:2020Color:Attitude Black MicaFrame Number:MR2BF3HK9K4006933Engine Number:2AR2275322 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, which are indirect taxes, on their local...