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August 6, 1999ITAD RULING NO. 016-99Sec. 106 Sec. 108206-93 087-97Embassy of the Sovereign Military Order of Malta6th Floor, Cattleya Condominium,235 Salcedo St., Legaspi VillageMakati CityAttention: H.E. Enrique P. SyquiaAmbassadorGentlemen :This refers to your letter dated September 2, 1997 to the Department of Foreign Affairs (DFA), regarding the request of the Embassy of the Sovereign Military Order of Malta (SMOM) for a Certification of Value-added Tax (VAT) Exemption.In reply, please be informed that while Article 34 of the Vienna Convention on Diplomatic Relations of 1961 exempts 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., ad valorem tax and VAT. Nevertheless, under the principle of reciprocity, this Office may grant tax exemption to the embassy of a foreign state and to the members of diplomatic missions on their local purchases of goods and services, provided that they can submit to the Commissioner of Internal Revenue or his duly...