VAT Exemption for the Sale, Printing, and Publication of Books, Newspapers, and Magazines: BIR Rules

Books, and newspapers, magazines, reviews, or bulletins that meet a three-part test, are exempt from the 12% value-added tax on their sale, importation, printing, or publication under Section 109(1)(R) of the National Internal Revenue Code (NIRC), as amended. The periodical must (1) appear at regular intervals, (2) carry fixed prices for subscription and sale, and (3) not be devoted principally to paid advertisements. Books qualify outright; digital-only formats and ad-heavy freebies generally do not.

What does Section 109(1)(R) actually exempt? #

Section 109(1)(R) of the NIRC removes the sale, importation, printing, and publication of qualifying books and periodicals from the 12% VAT system entirely — no output VAT is charged on the qualifying product, and the transaction sits outside VAT rather than being taxed at 0%. This exemption predates the TRAIN Law (Republic Act No. 10963) and remains in force under the current, amended NIRC.

The BIR formally clarified the scope of this provision in Revenue Memorandum Circular (RMC) No. 75-2012, “Clarifying Section 109 (1)(R) of the National Internal Revenue Code of 1997, as amended, on the VAT Exemption of the Sale, Importation, Printing or Publication of Books, Newspapers, Magazines, Reviews or Bulletins.” The statutory text itself reads:

“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.”

Note the split treatment built into that single sentence: books are exempt without any further conditions attached. Newspapers, magazines, reviews, and bulletins are exempt only if they clear all three qualifying tests below — a book does not need to appear at regular intervals or carry a fixed subscription price to qualify, but a periodical does.

The three-part test for newspapers, magazines, reviews, and bulletins #

A periodical must satisfy all three conditions simultaneously to keep its VAT-exempt status under Section 109(1)(R); failing even one test pulls the entire publication back into the standard 12% VAT regime on its sale, printing, and publication. RMC No. 75-2012 frames these as cumulative requirements, not alternatives.

A publication that is free to the reader can still pass the “fixed price” test if it maintains a genuine, published subscription/sale price structure (for example, a trade magazine mailed free to qualified subscribers but sold at a stated cover price on newsstands). What sinks the exemption is usually the third test: once paid advertisements become the publication’s primary content rather than a secondary revenue source alongside real editorial content, RMC No. 75-2012’s clarification treats the item as outside the exemption.

Worked example: a qualifying trade magazine vs. a non-qualifying ad freebie #

A concrete side-by-side shows how the three-part test plays out in practice, since the difference between an exempt periodical and a taxable one often comes down to editorial-to-ad ratio and pricing structure rather than anything printed on the cover.

Case A — qualifying. Metro Construction Digest is a monthly trade magazine covering Philippine construction industry news, project profiles, and regulatory updates. It publishes on the first of every month (regular interval), sells for ₱150 per issue at newsstands with an annual subscription rate of ₱1,500 published on its masthead and website (fixed prices), and roughly 80% of its page count is editorial content, with the remaining 20% sold as display advertising to construction suppliers (not principally devoted to ads). Under Section 109(1)(R), Metro Construction Digest’s sale, printing, and publication are VAT-exempt — the publisher does not charge 12% output VAT on newsstand sales or subscriptions, and the printer’s fee for printing the magazine (as the publication itself, not a separate unrelated print job) also falls within the exemption.

Case B — non-qualifying. ShopSaver Weekly is a free classifieds-and-coupons flyer distributed door-to-door every week. It has no subscription price, no newsstand price, and roughly 90% of its pages are paid advertisements and classified listings, with only a thin strip of filler editorial content. Even though it appears at a regular weekly interval, it fails both the fixed-price test (there is no subscription or sale price — it is simply distributed free with no rate card) and the not-principally-ads test. ShopSaver Weekly’s sale (to the extent any commercial arrangement exists) and its printing are subject to the standard 12% VAT, and if the publisher engages an outside commercial printer, that printer’s service fee is VAT-able and subject to normal withholding, since the underlying product does not qualify for the Section 109(1)(R) exemption.

Printed product exemption vs. a printer’s separate service fee #

This section addresses a distinction the statute itself does not spell out but that trips up printers in practice: Section 109(1)(R) exempts the qualifying printed product — the sale, importation, printing, or publication of the book or periodical itself — not every service a commercial printing business performs. A print shop’s ordinary business of printing whatever a client brings in is a separate question from whether that specific output happens to be an exempt book or periodical.

If a commercial printer produces a client’s marketing flyers, product brochures, or business forms — none of which independently qualify as a book, newspaper, magazine, review, or bulletin meeting the three-part test — that printing service is an ordinary VATable service. The printer charges 12% output VAT on the service fee (once it is VAT-registered and above the VAT threshold), and the client, if it is a Top Withholding Agent, applies the standard expanded withholding tax (EWT) rate on the payment: 1% on printed goods purchased under a supply arrangement or 2% on printing services, per Revenue Regulations No. 11-2018 as amended by RR No. 7-2019 and RR No. 24-2025. This is the same TWA framework covered in BIR Form 2307 for Purchases of Goods, where the ATC codes and withholding thresholds for goods purchases are explained in full. By contrast, when the same printer prints the publisher’s own qualifying magazine as the publication itself — not a discrete unrelated job for a third-party client — that printing falls inside the Section 109(1)(R) exemption because the statute names “printing or publication” alongside “sale” and “importation” as exempt activities for the qualifying product.

In short: the exemption travels with the qualifying product, not with the printer as a business. A printer can simultaneously handle an exempt magazine job and a VATable flyer job for two different clients in the same week, each governed by its own rule.

What does NOT qualify for the exemption #

Several categories commonly get assumed into this exemption incorrectly, so it is worth listing what falls outside Section 109(1)(R) even though it looks adjacent to books and periodicals.

• Digital and electronic formats. RMC No. 75-2012 confines “book,” “newspaper,” “magazine,” “review,” and “bulletin” to printed materials in hard copy. E-books, e-journals, online library subscriptions, digitized archives, CDs, and comparable electronic or computerized versions are not covered by this exemption, even if the same content is also sold in print. A digital-only publication is assessed under the regular VAT rules applicable to the underlying product or digital service.
• Publications principally devoted to paid advertisements. Shopper’s guides, real classifieds booklets, and giveaway flyers built around advertising revenue rather than editorial content fail the third test regardless of publication frequency.
• One-off or irregular printings. A single commemorative booklet, an annual report printed once a year outside a subscription structure, or an ad hoc pamphlet does not meet the “regular intervals” test the way a recurring periodical does.
• A commercial printer’s unrelated service work, as explained above — printing flyers, packaging, or forms for a client is not itself an exempt “book” or “periodical” merely because a printing press produced it.

Summary #

Section 109(1)(R) of the NIRC, as amended, keeps VAT out of the sale, importation, printing, and publication of books outright, and extends the same treatment to newspapers, magazines, reviews, and bulletins only when they clear three cumulative tests: regular publication intervals, fixed subscription and sale prices, and content that is not principally devoted to paid advertisements. RMC No. 75-2012 further confines the exemption to hard-copy printed materials, excluding e-books and other digital formats, and the exemption attaches to the qualifying printed product itself — a commercial printer’s separate fee for producing a client’s non-qualifying materials, like marketing flyers, remains ordinary VATable, EWT-subject printing work. Publishers relying on this exemption should keep documentation — subscription rate cards, publication schedules, and ad-to-editorial ratios — that supports all three tests, since the burden of proving an exemption falls on the taxpayer claiming it. For the fuller catalog of goods and services Section 109 exempts from VAT, see VAT-Exempt Transactions Under NIRC Section 109.