BIR Ruling [DA-448-06]

July 21, 2006 BIR RULING [DA-448-06] Iconpress Publishing Co. Unit 6D, Tower B, Kingswood Cond., Vito Cruz Ext., Makati City Attention: Mr. Richard Villarin President Gentlemen : This refers to your letter dated June 6, 2006 requesting for an exemption from the Value Added Tax pursuant to the provisions of the Section 109 (y) of the Tax Code of 1997, as amended by Republic Act No. 9337. It is represented that your company, ICONPRESS PUBLISHING INC. is a stock corporation registered with the Securities and Exchange Commission whose primary purpose is to establish a print communication network by publishing periodicals, journals, reports, articles, features, profiles, and magazines of general circulation. In reply, please be informed that Section 109(R) of the Tax Code of 1997, as amended by Republic Act No. 9337 dated July 1, 2005, 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(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. 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, Commissioner of Internal Revenue By : (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service