Jatsco Multi-ventures, Inc.

July 30, 2008 BIR RULING [DA-(VAT-013) 092-08] 109 (y); DA-448-2007 Jatsco Multi-ventures, Inc. 1 Duhat St., Antonio Subdivision Dalandanan, Valenzuela City Attention: Ms. Ma. Teresa M. Ortico President Gentlemen : This refers to your letter dated June 27, 2008 requesting in effect, for exemption from the 3% creditable value-added tax (VAT)/percentage tax pursuant to the provisions of Section 109 (y) of the Tax Code of 1997. It appears that your company, Jatsco Multi-ventures, Inc. is engaged in publishing, distribution and sale of textbooks to both the national and local government units (LGUs, e.g., provincial, municipal and city governments); and that in the course of your recent transactions with the different LGUs, you were requested to provide them a ruling from this Office granting you an exemption from the payment of 3% creditable VAT/percentage tax. In reply, please be informed that Section 109, par. (y) 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, you 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 (z) 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, if you have other transactions such as the printing of brochures, which are subject to the VAT, you will also be required to register your business as a VAT business entity and issue a separate VAT invoice/receipt to record such transactions. STIHaE 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.) JAMES H. ROLDAN Assistant Commissioner Legal Service