Tax Liability of the Publisher of Newspapers and Magazine

March 3, 1988 BIR RULING NO. 073-88 103 (f) 000-00 073-88 Gentlemen : This refers to your letter dated February 2, 1988 requesting, in effect, exemption from the 10% value-added tax passed on to you on your purchase of production supplies. You have represented that the Philippine Journalists, Inc. of Port Area, Manila, is the publisher of People's Journal, People's Tonight, Manila Journal, People's Bagong Taliba and Women's Journal; that you have purchases of about P9 M worth of production supplies per month and your company is shouldering the 10% VAT on gross on all supplies purchased; and that this is quite heavy on your part and find your company at a losing end. In reply, please be informed that your request is answered in the negative. As publisher of newspapers and magazine which appear at regular intervals with fixed prices for subscription and sale and which are not devoted principally to the publication of advertisements, you are exempt from the value-added tax under Section 103(f) of the Tax Code as amended by E.O. No. 273. However, under the said tax exemption provision, you are only exempt from the tax for which you are directly liable. In connection with your operations and transactions, you procure/purchase goods and services which are subject to the value-added tax. The tax is directly payable by the manufacturers and contractors, respectively. The purchaser does not really pay the tax. The price is the sum total paid for the goods and services; and the amount added because of the tax is paid as part of the price to get the goods/services. Consequently, the fact that said tax may ultimately be shifted to or passed on to you will not constitute the same as tax payable by you for purposes of the exemption. (Phil. Acetylene Co. vs. Commissioner of Internal Revenue, G.R. No. L-19707, August 17, 1967) aisadc Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner