Emerald Publishing House

July 8, 2010 BIR RULING [DA-(VAT-017) 117-10] Sec. 109 (R); VAT Ruling No. 097-91; BIR Ruling No. DA-427-03 Emerald Publishing House 7344 A. Bonifacio Ext. San Dionisio Paraaque City Attention: Ms. Cresencia R. Idang Manager Gentlemen : This refers to your letter dated February 11, 2010 stating that Emerald Publishing House is duly registered with the Department of Trade and Industry (DTI) under DTI Certificate of Registration No. 00856804 dated September 15, 2009 and is likewise registered with the Bureau of Internal Revenue (BIR) with TIN 129-299-856-000; that it is engaged in publishing of books as provided in Republic Act (RA) No. 8047, otherwise known as "An Act Providing for the Development of the Book Publishing Industry". Based on the foregoing representations, you now request for an opinion that your publication of books is exempt from value-added tax (VAT) pursuant to Section 109 (R) of the Tax Code of 1997, as amended by RA No. 9337, as implemented by Revenue Regulations No. 16-2005. In reply thereto, please be informed that Section 4.109-1 (B) (r) of Revenue Regulations No. 16-2005, implementing Republic Act (R.A.) No. 9337, provides that "(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;" shall be exempt from VAT. IESTcD Prescinding from the above-cited provisions, it is clear that there are four (4) activities that are exempt from the coverage of VAT, i.e., sale, importation, printing and publication of books, newspapers, magazines, reviews and bulletins. Moreover, the features of the said items, like magazine should appear at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of paid advertisements. Thus, in stressing the rationale of the above-mentioned provision, this Office elucidated the matter in BIR Ruling No. DA427-03 dated November 25, 2003, as follows: ". . . the sale of magazines and newspapers, or newsletter, the law requires that in order that the same may be exempted from VAT, such newspaper, magazine, review or bulletin must appear at regular intervals with fixed price for subscription and sale and which is not devoted principally to the publication of paid advertisements. In the absence of the above-criteria, your sale of magazines and newspaper shall be subject to the 10% VAT. . . ." SUCH BEING THE CASE, this Office holds that the publication of books 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 null and void. Very truly yours, (SGD.) GREGORIO V. CABANTAC Deputy Commissioner Legal & Inspection Group