Casa Reyes Restaurant

January 20, 2009 BIR RULING [DA-(OSL-001) 026-09] 356-04 Casa Reyes Restaurant Connecticut Carpark Greenhills Shopping Center San Juan, Metro Manila Attention: Atty. Maria Lourdes R. Reyes President Gentlemen : This refers to your letter dated December 9, 2008 requesting for a Certificate of 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 Purposes." It is represented that the Casa Reyes, Inc. is a duly registered corporation engaged in the food production and restaurant service under the name of Casa Reyes Restaurant; that it is also a registered BMBE in San Juan on December 4, 2008; and that on December 4, 2008, Casa Reyes Restaurant was awarded the Certificate of Authority for Barangay Micro-Business Enterprise until December 4, 2010. In reply thereto, please be informed that Sections 3 (a) and 7 of R.A. No. 9178 provides that "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. TDcEaH 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 Treasurer, San Juan City, it is therefore exempt from the payment of income tax and consequent from withholding tax for income arising from the operations of the enterprise for a period of two (2) years or until December 4, 2010. 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, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service