BIR Ruling No. 98-2020

REPUBLIC OF THE PHILIPPINES

DEPARTMENF OF FINANCE

BUREAU OF INTERNAL REVENUE

Quezon City

Section 109 1(R) of the National Internal Revenue Code of 1997, as amended BIR Ruling No. 133-2015; BIR Ruling No. 083-2014; BIR Ruling No.372-2013

BIR Ruling No. 265-2013

VAT-004-2020

JAN 1 7 2020

# 952 Josefina, 3rd St., Zone 052, SAINT FRANCIS OF ASSISI PUBLICATIONS Brgy. 521, Sampaloc, Manila

Attention: ENGR. RENATO V. MARIANO

Manager / Owner

Gentlemen:

05, 2009, pursuant to Section 109 (1) (R) of the National Internal Revenue Code of 1997, as for the renewal of the VAT Exemption Certificate This refers to your letters dated November 03, 2015 and November 13, 2015, requesting dated February

amended.

IdentificationNo.(TIN It is represented that Saint Francis of Assisi Publications with BIR Taxpayer's and Certificate of Registration No. OCN

Department of Trade and Industry (DTI) under Certificate No. dated January 01, 1996, is a business name duly registered with the : that it is also registered with the National Book Development Board (NBDB) under Certificate of Registration No. books, and a book for day care services. ; and that it is engaged in publishing pre-school books, elementary

In reply, please be informed that Section 109 (1) (R) of the National Internal Revenue Code of 1997, as amended, provides that:

"SEC. 109. Exempt Transactions.

(l) Subject to the provisions of Subsection (2) hereof. the following

transactions shall be exempt from the value added tax.

xxxxxx XXX

(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;

The above provision is being implemented by Section 4.109-1 (B) (1) (r) of Revenue

Regulations (RR) No. 16-2005 dated September 1, 2005, to wit:

"Section 4.109-1. VAT Exempt Transactions.

SAINT FRANCIS OF ASSISI PUBLICATIONS VAT-004-2020 JAN 1 7 2020

XXXXXXXXX

(B) Subject to the provisions of Section 4.109.2 hereof, the following transactions shall be exempt from VAT:

XXXXXX XXX

(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;

In Revenue Memorandum Circular (RMC) No. 75-2012 dated November 22, 2012, this

National Internal Revenue Code of 1997, as amended, to wit: Office made a clarification on the VAT exemption granted under Section 109 (1) (R) of the

A newspaper, magazine, review or bulletin must be: (1) printed or published at regular intervals; (2) available for subscription and sale at fixed prices; and (3) are not principally devoted to the publication of paid advertisements.

2. The terms "book", "newspaper", "magazine", "review" and "bulletin" as include those in digital or electronic format or computerized versions. library sources, CDs and software. used in the provision refer to printed materials in hard copies. They do not including but not limited to: e-books, e-journals, electronic copies, online

of VAT, i.e., 1) sale; 2) importation; 3) printing; and 4) publication, of books, newspapers, magazines, reviews and bulletins. Moreover, there are certain requirements that have to be met Based on the foregoing, there are four (4) activities that are exempt from the coverage

under the above provisions, to wit: the newspaper, magazine, review or bulletin must be:

2. available for subscription and sale at fixed prices printed or published at regular intervals;

3 are not principally devoted to the publication of paid advertisements; and 4. printed in hard copies.

importation, printing and publication of books, newspapers, magazines, reviews and bulletins will be exempt from the imposition of VAT. The concurrence of the aforesaid requirements must be present in order that the sale,

school books, elementary, and a book for day care services, in hard copies, is exempt from the (1) (R) of the National Internal Revenue Code of 1997, as amended, provided they appear at principally to the publication of paid advertisements. (BIR Ruling No. 083-2014 dated May regular intervals with fixed prices for subscription and sale and which are not devoted payment of VAT and from the 3% percentage tax under Section 116, in relation to Section 109 04, 2014 and BIR Ruling No. 372-2013 dated October 10, 2013) In view thereof, Saint Francis of Assisi Publications' business of publication of pre-

activities such as the printing of materials other than books, newspapers, magazines, reviews its business as VAT business entity and must issue a separate VAT invoice / receipt therefor to record the same. (BIR Ruling No. 265-2013 dated July 12, 2013) and bulletins, said transactions are subject to VAT, and the taxpayer shall be required to register However, if Saint Francis of Assisi Publications is engaged in other non-exempt

to the cost of goods or services sold, it is no longer a tax but an additional cost which the However, being an indirect tax, it can be shifted or passed on to the buyer / purchaser, transferee or lessee of the goods, properties or services. Once shifted to the buyer / customer as an addition Moreover. VAT is an indirect tax payable by the seller and not the purchaser of goods.

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therefore, it cannot invoke its tax exemption privilege under Section 109 (R) of the National SAINT FRANCIS OF ASSISI PUBLICATIONS- buyer/customer has to pay in order to obtain the goods or services. Thus, the shifting of the VAT to Saint Francis of Assisi Publications does not make it the person directly liable and Internal Revenue Code of 1997, as amended, to avoid the passing on or shifting of the VAT. the 12% VAT pursuant to Section 107 of the same Code. (BIR Ruling No. 133-2015 dated Hence, notwithstanding that Saint Francis of Assisi Publications is a publication company, its purchases of goods, properties or services from its suppliers shall nevertheless be subject to April 30, 2015) JA

if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered as null and void. This ruling is being issued on the basis of the foregoing facts as represented. However.

Very truly yours,

neesomme

Commissioner of Internal Revenue CAESAR R.DULAY

K-1-LMAT 031799

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