Ilaw ng Tahanan Publishing, Inc.

February 19, 2009 BIR RULING [DA-(VAT-024) 102-09] Section 109 (R); BIR Ruling No. DA-149-2007 Ilaw ng Tahanan Publishing, Inc. Unit 402, Cityland III Condominium 105 V.A. Rufino corner Esteban Streets Legaspi Village, Makati City Attention: Ms. Juanita R. Roxas Publisher & Editor-In-Chief Gentlemen : This refers to your letter dated May 5, 2008 requesting, in effect, for a ruling exempting Ilaw ng Tahanan Publishing, Inc. from the payment of value-added tax (VAT). HESAIT Documents show that Ilaw ng Tahanan Publishing, Inc. is registered with the Securities and Exchange Commission (SEC) under SEC Registration No. CS200615246 issued on September 27, 2006. The primary purpose for which it was organized is "to carry on business as proprietors and publishers of newspapers, journals, magazines, books and other library works and undertakings; and also to carry on business as printers, booksellers, bookbinders, paper makers, stationeries, engraver, photographers, photographic printers, stereotypers, electro-typers, lithographers, machinists, silkscreeners, or any other business or manufacture that may seem expedient." In reply, please be informed that Section 109 (R) [then Section 109 (y)] of the Tax Code of 1997 as amended by Republic Act No. 9337 provides, viz. : "SEC. 109. Exempt Transactions. (1) Subject to the provisions of Subsection (2) hereof, the following transactions shall be exempt from the value-added tax: xxx xxx xxx (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; xxx xxx xxx" In view of the foregoing, Ilaw ng Tahanan Publishing, Inc. is exempt from VAT on its sale of newspapers, journals, magazines and books. ACcHIa However, Ilaw ng Tahanan Publishing, Inc. is not exempt from the VAT that is passed on to it on its purchase of materials in furtherance of its business. As a final purchaser, it pays the VAT not as a tax but as part of the cost of goods/materials it purchases from the seller/supplier. 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