Victorious Publications, Inc.

April 18, 2008 BIR RULING [DA-252-08] Sec. 109 (R); DA-078-2007 Victorious Publications, Inc. Unit B-5 9th Floor, Francesca Tower Edsa corner Scout Borromeo Quezon City Attention: Mila S. Lopez Chief Executive Gentlemen : This refers to your letter dated March 11, 2008 requesting exemption from value-added tax (VAT) pursuant to Section 109 (R) of the Tax Code of 1997, as amended. It is represented that Victorious Publications, Inc. is engaged in the publishing, distribution and sale of textbooks to both national and local government units ( e.g. provincial, municipal, and city government). In reply, please be informed that Section 109 (R) of the Tax Code of 1997, as amended, sale, importation, printing or publication of books and any newspaper, magazine, review or bulletin, which appears at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of paid advertisements, is exempt from the imposition of the Value-Added Tax. As such, regardless of the amount of the said transaction, you will not be subject to the VAT and consequently to the creditable VAT or to the 3% percentage tax under Section 116, in relation to Section 109 (V) of the same Code. In view thereof, your business of publishing and selling of books is exempt from the payment of the Value-Added Tax/Final Value-Added Tax and from the 3% percentage tax. However, if you have other transactions such as the printing of brochures which are subject to the Value-Added Tax, you will also be required to register your business as a VAT business entity and issue a separate VAT invoice/receipt to record such transactions. cCAIDS This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service