Lampara Publishing House, Inc.

February 17, 2009 BIR RULING [DA-(VAT-022) 093-09] Section 109 (y); DA (VAT-020) 147-2008 Lampara Publishing House, Inc. 83 Sgt. E. Rivera St., San Francisco del Monte Brgy. Manresa, Quezon City Attention: Ryan Cornel Accounting Head Gentlemen : This refers to your letter dated November 8, 2008, seeking confirmation of your exemption from the payment of value-added tax (VAT) pursuant to Section 109 (y) of the Tax Code of 1997. Documents submitted disclosed that LAMPARA PUBLISHING HOUSE, INC. with TIN: 210-662-258-000, is a domestic corporation, registered with the Securities and Exchange Commission (SEC) on March 5, 2001, bearing SEC Reg. No. A200100938; that its primary purpose is to carry on a publishing business as proprietor and publisher of books, magazines, journal and other literary works and undertakings; and also to carry on a business as printer, bookseller, bookbinder, stationery, engraver, photographic printer, stereo typer, electro-typer, lithographer, silk screener and any other business analogous to the foregoing or any of them, or in connection therewith; that it is a registered member of the National Book Development Board (NBDB) with Certificate of Registration No. 2008-0603 valid from July 29, 2008 until April 30, 2011; that it is publishing children's story books and educational activity books for Filipino children, not to emphasize the facts that these are all educational materials that can be used as supplementary materials for grade school and pre-school; that it is not accepting any form of advertisement and its prices are fixed and publishes books at regular intervals. Hence, its request. In reply, please be informed that Section 109 (y) of the Tax Code of 1997, 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 value-added tax. As such, regardless of the amount of the said transaction, it will not be subject to the VAT and consequently from the creditable VAT. Neither will it be required to pay 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 book is exempt from the payment of the value-added tax/creditable value-added tax and from the 3% percentage tax. However, if it has other transactions (such as the printing of brochures) which are subject to the VAT, it will also be required to register its business as a VAT business entity and issue separate VAT invoice/receipt to record such transaction. 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. ATcaEH Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service