RMO No. 10-2019: Grants Value-Added Tax privileges to resident foreign missions, their qualified personnel and the dependents of the latter

Key points

1. Reciprocity. VAT privileges on local purchases of goods and services may be granted only with categorical confirmation from the DFA Office of Protocol that the foreign government gives the same privileges to Philippine Foreign Service Posts and their personnel. Exemption is either at point-of-sale or on a refund/reimbursement basis.
2. Point-of-sale exemption. Missions and members endorsed by the DFA-OP get a VAT Certificate (VC). Qualified personnel and dependents may get a VAT Identification Card (VIC) instead. Sellers cannot pass on VAT on their purchases, which qualify for zero rating under the Tax Code as amended by RA No. 10963.
3. Motor vehicles. The VC/VIC cannot be used to secure zero-rated VAT or Ad Valorem Tax exemption on local purchase of a motor vehicle. The Order sets a separate BIR Ruling procedure for those purchases.
4. Refund basis. Where the DFA-OP endorses refund or reimbursement, the BIR issues a Ruling that is attached to the claim, which is filed within two (2) years after the close of the taxable quarter of the sale under Section 112(A) of the Tax Code and RMC No. 54-2014, as amended.
5. Validity and renewal. The initial VC/VIC is generally effective for two (2) years and renewable every two (2) years, or until the personnel’s term of office ends, unless sooner cancelled, revoked or suspended. Renewal requests are filed not later than two (2) months before expiration.
6. Suspension, loss and surrender. VAT exemption is suspended or cancelled if the home country suspends it for Philippine posts. Personnel relieved of duty surrender their VC/VIC. A lost VC/VIC is replaced on a request with a notarized affidavit through the DFA-OP, and existing valid VC/VIC holders continue to use theirs until validity ends.

Who is affected

• Resident foreign missions (embassies and consulates)
• Qualified personnel of foreign missions
• Qualified dependents of mission personnel

Deadlines and effectivity

• VC/VIC valid for two (2) years, renewable every two (2) years
• Renewal request not later than two (2) months before expiration
• Refund claim within two (2) years after the close of the taxable quarter of the sale