BIR Ruling No. 223-12

March 29, 2012 BIR RULING NO. 223-12 Sec. 109 (R) NIRC; BIR Ruling No. 007-2011; BIR Ruling No. 164-2011 Nalandangan, Inc. Gaddang St., La Vista Brgy. Pansol, Quezon City Attention: Jovita Ventura Castro President Gentlemen : This refers to your letter dated 04 October 2011 requesting the issuance of a certificate of exemption from the value-added tax (VAT) on the reprinting of Jose Rizal's book, "Noli Me Tangere" by APO Production Unit, Inc., pursuant to Section 109 (R) of the Tax Code of 1997, as amended. In reply, please be informed that Nalandangan, Inc. is exempt from VAT on its publication and sale of books, as previously confirmed in our letter dated 19 January 2011. The aforementioned exemption is pursuant to the provision of Section 109 (R) of the Tax Code of 1997, as amended, which states that the "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 VAT". ( BIR Ruling No. 007-2011 dated January 19, 2011 ) CaAcSE With regard to the printing of the book "Noli Me Tangere", please take note that under Section 4.109-1 (B) (r) of Revenue Regulations No. 16-2005, implementing RA No. 9337, there are four (4) activities that are exempt from the coverage of VAT, i.e. , sale, importation, printing and publication of books, newspapers, magazines, reviews and bulletins. The only condition for the exemption is that the features of the said items, like magazine should appear at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of paid advertisements. Thus, in stressing the rationale of the above-mentioned provision, this Office elucidated the matter in BIR Ruling No. 164-2011 dated May 23, 2011, as follows: ". . . the sale of magazines and newspapers, or newsletter, the law requires that in order that the same may be exempted from VAT, such newspaper, magazine, review or bulletin must appear at regular intervals with fixed price for subscription and sale and which is not devoted principally to the publication of paid advertisements. In the absence of the above-criteria, your sale of magazines and newspaper shall be subject to the 10% VAT. . . ." In view of the foregoing, this Office hereby holds that the printing of the book, "Noli Me Tangere", by APO Production Unit, Inc. is EXEMPT from VAT. Consequently, APO Production Unit, Inc. should not pass on any VAT to Nalandangan, Inc. aCcEHS 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 null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue