BIR Ruling [DA-371-05]

August 30, 2005 BIR RULING [DA-371-05] Section 109 (y); VAT Ruling No. 022-2000 Book Wise Publishing House, Inc . 19 San Nicolas St., Saint Martin Village, Paraaque City Attention: Ms . Ma . Socorro M . Miranda President Gentlemen : This refers to your letter dated June 28, 2005 requesting for an exemption from the 3% Creditable Value Added Tax pursuant to the provisions of Section 109 (y) of the Tax Code of 1997. It is represented that your company BOOK WISE PUBLISHING HOUSE, INC. is engaged in the publishing, printing, distribution and sale of textbooks to both national and local government units (e.g. provincial, municipal and city government); and that in the course of your recent transactions with the different LGU's you were requested to provide them a ruling from this Office granting you exemption from payment of the 3% Creditable Value Added Tax and VAT. In reply, please be informed that Section 109, par. (y) of the Tax Code of 1997, 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 from the creditable VAT or to the 3% percentage tax under Section 116, in relation to Section 109(z) 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/Creditable 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. EcICDT This ruling is being issued on the basis of the foregoing facts as represented. If upon investigation, it will be discovered that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) JOSE MARIO C. BUAG OIC-Commissioner of Internal Revenue