BIR Ruling [DA-554-06]

September 15, 2006 BIR RULING [DA-554-06] Section 109 (R); VAT Ruling No. 044-02 The Modern Teacher in the Grade School Inc . 647 P. Paterno St. Quiapo, Manila Attention: Dr. Amado A. Castro President Gentlemen : This refers to your letter dated July 12, 2006 requesting for a ruling exempting The Modern Teacher in the Grade School Inc. from the payment of value-added tax (VAT). As represented, The Modern Teacher in the Grade School Inc. is engaged in the publishing business. It publishes "The Modern Teacher" monthly except in the months of April and May, for a fixed price. "The Modern Teacher" is a professional reading reference for public school teachers. It is not devoted to the publication of paid advertisements. If any, advertisements in the magazines are fully printed without any payment. In reply, please be informed that Section 109(R) [then Section 109(y)] of the Tax Code of 1997 as amended by Republic Act No. 9337 provides, viz: "SEC. 109. Exempt Transactions . (1) Subject to the provisions of Subsection (2) hereof, the. following transactions shall be exempt. from the value-added tax: xxx xxx xxx (R) 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; xxx xxx xxx" Since the professional reading reference for public school teachers (1) appears at regular intervals; (2) is available for subscription/sale at a fixed price; and (3) is not principally devoted to the publication of paid advertisement, said publication and distribution is exempt from VAT. 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 as null and void. ATHCac Very truly yours, Commissioner of Internal Revenue By: (SGD.) GREGORIO V. CABANTAC Deputy Commissioner