BIR Ruling [DA-237-06]

April 11, 2006 BIR RULING [DA-237-06] DA 582-04 Taedo Electronics Center No. 289 F. Taedo Street San Nicolas, Tarlac City Attention: Atty. Roberto E. Go Gentlemen : This refers to your letter dated March 22, 2006 requesting exemption from the payment of income tax pursuant to the provisions of Republic Act (R.A.) No. 9178. It is represented that pursuant to R.A. No. 9178; otherwise known as "An Act to Promote the Establishment of Barangay Micro Business Enterprise, Providing Incentives and Benefits Therefor, and for other Purposes," you were awarded the Certificate of Authority for Barangay Micro Business Enterprise last June 1, 2004 entitling you to all benefits and incentives subject to the terms and conditions set forth in the said law, which will expire on February 14, 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 enterprises 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) 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 BMBE's shall be exempt from income tax for income arising from the operations of the enterprise. The LGUs are encouraged either to induce the amount of local taxes, fees and charges imposed or to exempt the BMBEs from local taxes, fees and charges." Inasmuch as Taedo Electronics Center is a registered BMBE and was awarded BMBE Certificate of Authority by the City of Tarlac, 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 February 14, 2006 or until February 14, 2008. It is required, however, for you to register with the Revenue District Office having jurisdiction over you. ( BIR Ruling No. DA582-04 dated November 12, 2004 ) This ruling is being issued on the basis 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. SacTCA Very truly yours, (SGD.) PABLO M. BASTES, JR. OIC-Head Revenue Executive Assistant Legal Service