VAT Ruling No. 008-06

July 14, 2006 VAT RULING NO. 008-06 Sec. 109 Mr. Raymund S. Catabijan Proprietor Saint Matthew's Publishing 744 Baltazar St., Cristi Compd. Guitnang Bayan 1, San Mateo, Rizal Gentlemen : This refers to your letter dated February 27, 2006 requesting for a ruling that being a publisher of textbooks you are exempt from the value-added tax and consequently to the final vat withholding on your dealings with the government. It is represented that you are engaged in business purely as publisher of textbooks and that you do not handle any printing job because you engage the services of subcontractor printing press to do the same. It is your position that as publisher of textbooks, you are exempt from the value-added tax. Hence, your government-clients should not deduct any VAT withholding from their gross payments to you. 07taxcda In reply, please be informed that Section 109 of the Tax Code in pertinent part provides, viz: "SEC. 109. Exempt Transactions . . . . "(R) 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;" This same provision is reiterated in Section 4.109-1(B)(r) of RR No. 16-2005, the Consolidated Value-Added Tax Regulations of 2005. Such being the case, your position that your business as a publisher of textbooks is exempt from VAT is hereby confirmed. Accordingly, the government subscribers or buyers shall not withhold the 5% final VAT on their payments to you. 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.) JOSE MARIO C. BUAG Commissioner of Internal Revenue