BIR Ruling [DA-464-03]

December 5, 2003 BIR RULING [DA-464-03] Sec. 109 VAT Ruling No. 082-2002 Abiva Publishing House, Inc . Abiva Building, 851 G. Araneta Avenue 1113 Quezon City Attention: Mr . Jorge A . Garcia Vice-President Gentlemen : This refers to your letter dated April 2, 2003 requesting for an exemption from VAT and the 3% Creditable Value Added Tax/Percentage Tax pursuant to the provisions of Section 109(y) of the Tax Code of 1997. It is represented that your company is engaged in the publishing, printing, and distribution and sale of textbooks to both national and local government units ( e . g .provincial, municipal and city government);that in the course of your recent transactions with the different LGUs, you were requested to provide them a ruling from the BIR granting you an exemption from payment of the 3% Creditable Value Added Tax and VAT, hence, this request for exemption. In reply, please be informed that Section 109(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. Neither will you be required to pay 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 register 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. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. DTcASE Very truly yours, Commissioner of Internal Revenue By: (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group