SBCN Hair Care, Inc.

December 22, 2007 BIR RULING [DA-677-07] R.A. 9178; DA-471-2005; 582-2004 SBCN Hair Care, Inc. Unit 252 2/F SM City Sta. Rosa, National Highway, Tagapo, Sta. Rosa, Laguna Attention: Ms. Nenita M. Esperas Finance Manager M a d a m : This refers to your letter dated September 11, 2007 requesting exemption from the payment of income tax pursuant to the provisions of Republic Act No. 9178. It is represented that pursuant to Republic Act 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 Purposes," you were awarded the Certificate of Authority for Barangay Micro-Business Enterprise (BMBE) last July 16, 2007 entitling you to all benefits and incentives subject to the terms and conditions set forth in the said law, which will expire on July 15, 2009. In reply, please be informed that Sections 3 (a) and 7 of R.A. 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 Republic Act No. 6977, as amended by Republic Act No. 8289. CSTEHI 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 SBCN Hair Care, Inc. is a registered BMBE and was awarded BMBE Certificate of Authority by the City of Sta. Rosa, Laguna, 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 July 16, 2007 or until July 15, 2009. It is required, however, for you to register with the Revenue District Office having jurisdiction over you. (BIR Ruling No. DA-582-2004 dated November 12, 2004) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered null and void. HACaSc Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service