BIR Ruling No. 143-12

February 27, 2012 BIR RULING NO. 143-12 Sec. 109 (R) of the Tax Code of 1997; BIR Ruling No. 164-2011; BIR Ruling No. 049-2011; BIR Ruling No. 019-2011; BIR Ruling No. 007-2011 Kristin Educational Exponents Publication 18 Deerwood St., Area 15, Camdem Ext., Brookside Hills Subd., Muntingdilaw Antipolo City, Rizal 1870 Attention: Corazon Sempio Proprietor Gentlemen : This refers to your letter dated June 17, 2011 requesting for an exemption of KRISTIN EDUCATIONAL EXPONENTS PUBLICATION from payment of VAT and the 3% Percentage Tax. It is represented that Corazon Gonzales Sempio is doing business under the trade name KRISTIN EDUCATIONAL EXPONENTS PUBLICATION with Tax Identification Numbers (TIN) 114-749-778-001 (for business address registered at Unit 7 Coml Bliss Teachers Village, Balon Bato, Balintawak, Quezon City) and 114-749-778-002 (for business address registered at 18 Deerwood St., Area 15, Camdem Ext., Brookside Hills Subd., Muntingdilaw, Antipolo City, Rizal), a single proprietorship registered with the Department of Trade and Industry under Certificate No. 00713787 dated April 7, 2009 registered with the Bureau of Internal Revenue as engaged in the business of "publishing of books, brochures, musical books, retail of books, office/school supplies, newspapers, magazines" ; that it is likewise registered with the National Book Development Board (NBDB) under Certificate of Registration No. 1300 valid from November 2, 2010 until April 30, 2013; and that the Department of Budget and Management certified that it registered in the Philippine Government Electronic Procurement System on April 13, 2009 and its registration will expire on November 2, 2011. Based on the foregoing, you now request for the confirmation of your opinion that KRISTIN EDUCATIONAL EXPONENTS PUBLICATION is exempt from the payment of VAT and 3% percentage tax as the company is engaged in the publishing, printing and distribution and sale of textbooks. In support of your request, you submitted the following documents: 1) Letter request for tax exemption; 2) Certified true copy of BIR Certificates of Registration for TIN 114-749-778-001 and 114-749-778-002; 3) Certified true copy of 2010 Annual Income Tax Return together with attached Income Statement; 4) Certified true copy of sample purchase order and sales invoice issued to/by KRISTIN EDUCATIONAL EXPONENTS PUBLICATION to Department of Education; 5) Certified photo copy of Certificate of Registration No. 1300 issued by the National Book Development Board; 6) Certified true copy of Certificate of Registration issued by the Department of Budget and Management; 7) Certified true copy of Mayor's Permit dated January 6, 2011 issued by the City of Antipolo; 8) Certification dated September 1, 2011 duly authenticated by the Department of Trade and Industry; and 9) Certified sales invoices and receiving reports issued by KRISTIN EDUCATIONAL EXPONENTS PUBLICATION 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, KRISTIN EDUCATIONAL EXPONENTS PUBLICATION 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, KRISTIN EDUCATIONAL EXPONENTS PUBLICATION's business of selling of booklets, pamphlets, manuals and the like materials (addendum or annexes or test materials forming part of the manuals and pamphlets) is exempt from the payment of VAT/creditable VAT and from the 3% percentage tax. (BIR Ruling No. 007-2011 dated January 19, 2011) However, if KRISTIN EDUCATIONAL EXPONENTS PUBLICATION has other transactions such as the printing, selling or importing of brochures and newspaper, magazine, review or bulletin which does not appear at regular intervals with fixed prices for subscription and sale and which is devoted principally to the publication of paid advertisements which are subject to the Value Added Tax, it will also be required to register the business as a VAT business entity and issue a separate VAT invoice/receipt 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 ascertained that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue