The Bureau of Internal Revenue (BIR) has issued Revenue Memorandum Order (RMO) 10-2019, providing for the grant of value-added tax (VAT) privileges to resident foreign missions (foreign embassies and consulates). The privileges refer to the grant of VAT exemption to resident foreign missions, qualified personnel, dependents of qualified personnel, and entities that are similarly categorized as missions for their local purchase of goods and services. Note that the grant of the VAT exemption is largely based on the international law principles of reciprocity and comity enshrined in the Philippine Constitution.
Under the principle of reciprocity, the BIR may grant VAT exemption privileges, which would depend on a categorical confirmation from the Department of Foreign Affairs (DFA) that the foreign government provides the same VAT privileges to Philippine Foreign Service Posts (PFSPs) and its personnel on their purchase of goods and services in the concerned foreign country.