C & E Publishing Inc.

October 16, 2008 BIR RULING [DA-(C-099) 305-08] Section 109 (R); BIR Ruling No. DA-107-06 C & E Publishing Inc. 1672 Quezon Avenue South Triangle, Quezon City Attention: Ms. Maria Bella V. Montanez Senior Manager Gentlemen : This refers to your letter dated March 10, 2008 requesting for a ruling on the proper creditable withholding tax to be deducted and withheld from income payments to your company. As represented, C & E Publishing Inc. is engaged in the business of publication and sale of books to various buyers/customers, mostly private and government schools. In reply, please be informed that pursuant to Section 2.57.2 (E) (3) (f) of Revenue Regulations (Rev. Regs.) No. 6-2001, as amended, a creditable income tax at the rate of 2% shall be withheld on income payments to printers, bookbinders, lithographers and publishers except those principally engaged in the publication or printing of any newspaper, magazine, review or bulletin which appears at regular intervals, with fixed prices for subscription and sale. The tax is computed by multiplying the income payment by 2%. Under Section 2.57.2 (M) of Rev. Regs. No. 2-98 as amended by Rev. Regs. No. 17-2003, a creditable income tax at the rate of 1% shall be withheld on income payments made by the top ten thousand (10,000) private corporations to their local/resident supplier of goods including non-resident alien engaged in trade or business in the Philippines with whom they regularly make purchases of goods. Under the same Section, however, one single purchase which involves PhP10,000.00 or more shall be subject to a withholding tax. The tax is computed by multiplying the income payment by 1%. TSADaI Likewise, Section 2.57.2 (N) of Rev. Regs. No. 6-2001, as amended, provides that income payments, except any single purchase which is P10,000.00 and below, which are made by a government office, national or local, including government-owned or controlled corporations, on their purchases of goods from local suppliers are subject to the one percent (1%) creditable withholding tax. The tax is also computed by multiplying the income payment by 1%. Accordingly, your customers shall withhold a creditable income tax from income payments to your company at the rate of either 1% and/or 2% depending on the class of payee they belong to. 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. Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service