Casa Reyes Restaurant

March 8, 2007 BIR RULING [DA-144-07] DA 609-06 Casa Reyes Restaurant Connecticut Carpark Greenhills Shopping Center San Juan, Metro Manila Attention: Atty. Ma. Lourdes R. Reyes President Gentlemen : This refers to your letter dated January 5, 2007 requesting for exemption from the payment of income tax pursuant to the provisions of Republic Act (R.A.) No. 9178, otherwise known as "An Act to Promote the Establishment of Barangay Micro Business Enterprises (BMBEs), Providing Incentives and Benefits Therefor, and for other Purpose." CASA Reyes Restaurant was awarded the Certificate of Authority for Barangay Micro Business Enterprise (BMBE) on December 4, 2006; and this will have a term of two (2) years or until December 4, 2008. In reply thereto, please be informed that Sections 3(a) and 7 of R.A. No. 9178, provide, viz: "Sec. 3. Definition of Terms. As used in the Act, the following terms shall mean: "(a) Barangay Micro Business Enterprise, hereinafter referred to as BMBE, refers to any business entity or enterprise engaged in the production, processing or manufacturing of products or commodities, including agro-processing, trading and services, whose total assets including those arising from loans but exclusive of the land on which the particular business entity's office, plant and equipment are situated, shall not be more than Three Million Pesos (P3,000,000.00). The definition shall be subject to review and upward adjustment by the SMED Council, as mandated under R.A. No. 6977, as amended by R.A. No. 8289. xxx xxx xxx "Sec. 7. Exemption from Taxes and Fees. All BMBEs shall be exempt from income tax for income arising from the operations of the enterprise. The LGUs are encouraged either to reduce the amount of local taxes, fees and charges imposed or to exempt the BMBEs from local taxes, fees and charges." Inasmuch as CASA Reyes Restaurant is a registered BMBE and was awarded BMBE Certificate of Authority by the Office of the City Mayor, San Juan, it is therefore exempt from the payment of income tax for income arising from the operations of the enterprise for a period of two (2) years from December 4, 2006 until December 4, 2008. cSTDIC 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, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service