BIR Ruling No. 046-64

June 18, 1964 BIR RULING NO. 046-64 The American Book Company 1825 Sandejas Pasay City Attention : Mr . Pedro S . Isorena Branch Manager Gentlemen : Reference is made to your letter dated May 15, 1964 stating that: "This company has certain textbooks approved and selected by the Board of Textbooks for use in Philippine Public Schools. These textbooks, still in the form of manuscripts, are now under contract with the government to be supplied under the USOM-NEC-BPS Textbook Production Project. cdta "In view of the highly technical nature of editorial work needed for the books to be in shape before we could print them locally, these manuscripts authored by Filipinos, are sent to our editorial department in New York, which goes over the pedagogical philosophy of the books for editing, and finally for type-setting and page proofing before the final proofs and positives are sent to our local printer. "In the process of editing, the Board on Textbooks requires an okay of this body on the page proofs. As a result, these page proofs are sent to us in Manila, sometimes in small parts, or chapters, for forwarding to the Textbook Board for final approval. Also, the Bureau of Public School still has to check these proofs before they are formally indorsed to the Board on Textbooks. "Along the process, oftentimes corrections and additions are inserted in the page proofs by the reviewing committees of the Bureau of Public Schools, making it necessary for us to shuttle the proofs between Manila and New York until the Bureau of Public Schools has satisfied themselves with the work, and the proofs are prepared for make-readies." cdti You now request a ruling of this Office as to whether or not the so-called page proofs that are received by your local company from your office abroad are subject to any internal revenue tax. In reply thereto, please be informed that the page-proofs received by that firm from abroad for purposes of correction to meet the standard required by the Bureau of Public Schools and the Board on Textbooks before the same will be finally printed, are exempt from internal revenue taxes. This is for the reason that said page-proofs are not as yet for sale because they have not reached the stage where they could be of commercial value. As to the special import tax, please refer the matter to the Bureau of Customs which has jurisdiction on the same. prll Very truly yours, (SGD.) BENJAMIN N. TABIOS Acting Commissioner of Internal Revenue