Mutya Publishing House, Inc.

February 3, 2010 BIR RULING [DA-(VAT-005) 021-10] 109 (R); DA (VAT-013) 092-08 dtd. 7/30/2008 Mutya Publishing House, Inc. No. 105 Engineering Road Araneta University Village Potrero, Malabon City Attention: Mr. Jerome M. Katipunan VP for Operations Gentlemen : This refers to your letter dated July 07, 2009 requesting in effect, for exemption from the 3% creditable value-added tax (VAT)/percentage tax pursuant to the provisions of Section 109 (R) of the Tax Code of 1997, as amended. It appears that Mutya Publishing House, Inc. is duly registered with the Securities and Exchange Commission (SEC) with its amended Articles of Incorporation under SEC Registration No. CS200323279 dated April 27, 2009 with Taxpayer Identification Number (TIN) 227-386-515-000; that its primary purpose for which the corporation was formed are the following, to wit: "To print, publish and distribute all kinds of college books; and To carry on the business as importer and publishers of newspapers, journals, magazines, books and other literary work and undertakings; and to carry on the business as printers, book sellers, book binders, paper makers, stationers, engraver, photographic printers, stereotypes, electro-types, bibliographers, machinists, silk screeners, or other related activities." and that it is specifically engaged in publishing and distribution and sale of text books to both national and local government units ( e.g., provincial, municipal and city government). DEHaTC In reply, please be informed that Section 109, par. (R) of the 1997 Tax Code, 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 VAT. As such, regardless of the amount of the said transaction, the same will not be subject to said tax and consequently to the creditable VAT or to the 3% percentage tax under Section 116, in relation to Section 109 (V) of the same Code. In view thereof, your business of publishing and selling of books is exempt from the payment of the VAT/creditable VAT and from the 3% percentage tax. However, on your other activities as paper maker, stationer, engraver, photographic printers, stereotypes, electro-types, bibliographers, machinists, silk screeners which are subject to the VAT, you will also be required to register year 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. 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, Commissioner of Internal Revenue By: (SGD.) GREGORIO V. CABANTAC Deputy Commissioner Legal and Inspection Group