Sunshine Interlinks Publishing House, Inc.

August 14, 2008 BIR RULING [DA-(VAT-020) 147-08] DA571-07 Sunshine Interlinks Publishing House, Inc. 3/F Maine City Tower 236 Tomas Morato Street Barangay South Triangle Quezon City Attention: Mr. Joel G. Yap President Gentlemen : This refers to your letter dated July 11, 2008 stating that your company is duly registered with the Securities and Exchange Commission (SEC) under SEC Registration No. 06876 dated April 25, 2005; and that it is primarily organized for the following purpose(s), to wit: 1) To publish, distribute and sell of unpublished books, journals that will cater to every private and public schools for primary, secondary and college levels; 2) To engage in commercial printing jobs, that will cater school needs such as notebooks, student handbooks, school yearbooks, invitations, receipts and other accountabilities. Based on the foregoing representations, you now request for an opinion as to whether or not the publication and sale of the above books and other printings are exempt from value-added tax (VAT) pursuant to Section 4.109-1 (B) (r) of Revenue Regulations No. 16-2005, implementing Republic Act (R.A.) No. 9337. DcaCSE In reply thereto, please be informed that Section 4.109-1 (B) (r) of Revenue Regulations No. 16-2005, as amended, 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. 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 publication of paid advertisements. DaTICc As a general rule, the sale of educational materials and equipment to private and public educational institutions is subject to VAT. However, your sale, importation, printing and publication of books is exempt from VAT under Section 109 (r) of the Tax Code of 1997, as amended by R.A. No. 9337. SUCH BEING THE CASE, this Office holds that the publication, printing and sale of the books by your company to private and public schools are exempt from VAT pursuant to Section 4.109-1 (B) (r) of Revenue Regulations No. 16-2005, as amended. 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.) JAMES H. ROLDAN Assistant Commissioner Legal Service