October 17, 2019
ITAD BIR RULING NO. 036-19
Principle of Reciprocity; Revenue Memorandum Order No. 10-2019
Embassy of the Republic of Indonesia
185 Salcedo Street
Legaspi Village
1229 Makati City
Gentlemen :
This refers to your Note No. PK/1278/VI/2019 dated 17 June 2019, indorsed by the Department of Foreign Affairs, Office of Protocol (DFA-OP), requesting for a BIR ruling on the Value-Added Tax (VAT) exemption on the local purchase of goods and services for the Embassy of the Republic of Indonesia and its personnel. DACcIH
In reply, please be informed that while the Vienna Convention on Diplomatic Relations of 1961 exempts diplomatic missions (i.e., embassies and consulates) and their diplomatic agents from all dues and taxes, personal or real, national, regional or municipal, they are nevertheless subject to the indirect taxes of a kind which are normally incorporated in the price of goods or services (e.g., VAT).
Nevertheless, under the principle of reciprocity, this Office may grant tax privileges to a foreign embassy and to its members on their local purchases of goods and services, provided that they can submit to the Commissioner of Internal...
