Precious Pages Corporation

June 26, 2009 BIR RULING [DA-(VAT-062) 330-09] Section 109 (y); DA(VAT-020)147-2008; DA-148-2004; DA-571-07; VAT Ruling #22-2001; VAT Ruling #22-2000 Precious Pages Corporation 63 Sgt. E. Rivera St., San Francisco Del Monte Brgy. Manresa, Quezon City Attention: Ryan Cornel Accounting Head Gentlemen : This refers to your letter dated January 30, 2009, seeking confirmation of your exemption from the payment of value-added tax (VAT) pursuant to Section 109 (y) of the Tax Code of 1997. IDTcHa Documents submitted disclosed that PRECIOUS PAGES CORPORATION (PRECIOUS, for short), with TIN: 002-926-502-000, is a domestic corporation, registered with the Securities and Exchange Commission (SEC), on September 17, 1993, bearing SEC Registration No. ASO93-007287; that its primary purpose is to carry on business as proprietors and publishers of newspapers, journals, magazines, books and other literary works and undertakings; and also to carry on business as printers, booksellers, bookbinders, paper makers, stationeries, engraver photographers, photographic printers, stereo-typers, electro-typers, machinist, silk screeners, or any other business or manufactures that may seem expedient; that it is a registered member of the National Book Development Board (NBDB) with Certificate of Registration No. 2008-0468 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 fact that these are all educational materials that can be used as supplementary materials for grade school and pre-schools; that it is not accepting any forms 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 said 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. TSIEAD In view thereof, your business of publishing and selling of books is exempt from the payment of the value-added tax/creditable value-added tax and 3% percentage tax. However, if you have other transactions (such as the printing of brochures) which are subject to the VAT, you will be required to register your business as a VAT business entity and issue separate VAT invoices/receipts to record such transactions. 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 considered null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service