BC Educational, Inc.

April 24, 2009 BIR RULING [DA-(VAT-037) 211-09] 109 (R); DA (VAT-013) 092-08 dtd. 7/30/2008 BC Educational, Inc. Bonanza Plaza 2, Block 1, Lot 6 Hilltop Subdivision, Greater Lagro Novaliches, Quezon City Attention: Maria Angela Parma Gentlemen : This refers to your letter dated June 27, 2008 requesting in effect, for exemption from value-added tax (VAT) or 3% percentage tax pursuant to the provisions of Section 109 (R) of the Tax Code of 1997, as amended. It appears that BC Educational, Inc. is duly registered with the Securities and Exchange Commission (SEC) under SEC Registration No. A199915273 dated October 12, 1999 with Taxpayer Identification Number (TIN) 247-382-867-000; and that the primary purpose for which the corporation was formed is to prepare, compile, publish and print all kinds of educational and informative materials such as books, magazines, journals, periodicals, etc. and thus serve as a medium for a systematic exchange of information and views and in aid of this purpose to operate and maintain such establishments as bookstores, publishing house and/or printing facilities. In reply, please be informed that Section 109, par. (R) of the Tax Code of 1997, as amended, 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 (V) of the same Code. In view thereof, your business of publishing and selling of books is exempt from the payment of VAT/creditable VAT and from the 3% percentage tax, provided they appear at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of paid advertisements. 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. aTCAcI 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.) GREGORIO V. CABANTAC Deputy Commissioner Legal and Inspection Group