St. Augustine Publications, Inc.

November 9, 2007 BIR RULING [DA-585-07] Sec. 109; DA-464-2003 St. Augustine Publications, Inc. 1624-1626 Espaa cor Don Quijote Street Sampaloc, Manila Attention: Ms. Michelle R. Magallanes Vice-President Gentlemen : This refers to your letter dated June 25, 2007 requesting for a VAT exemption certificate pursuant to the provisions of Section 109 (R) of the Tax Code of 1997, as amended. AacCIT It is represented that St. Augustine Publications, Inc. is engaged in the publication of books for elementary and high school; that it is registered with the Bureau of Internal Revenue as VAT-exempt; that the books are sold to Dep-Ed and private schools; that one of the requirements for the release of Dep-Ed payments is the Certificate of VAT exemption, hence this request. In reply, please be informed that Section 109 (R) 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 (V) of the same Code, as amended. aHATDI In view thereof, your business of printing and selling of books is exempt from the payment of 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 as a VAT business entity and issue a separate VAT invoice/receipt to record such transaction. (BIR Ruling No. DA-454-2003 dated December 5, 2003) 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. ADcEST Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service