D'RBG Marine Ex-Import, Inc.

February 4, 2009 BIR RULING [DA-(OSL-003) 066-09] RA 9178; DA-356-2004 D'RBG Marine Ex-Import, Inc. Riverside, Canduman Mandaue City, Cebu Attention: Ms. Raquel Yu Lacamiento Treasurer Gentlemen : This refers to your letter dated December 3, 2008, relative to your request for 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, "An Act to Promote the Establishment of Barangay Micro Business Enterprises (BMBEs), Providing Incentives and Benefits Therefor, and for Other Purposes," D'RBG Marine Ex-Import, Inc. was awarded the Certificate of Authority for Barangay Micro-Business Enterprise (BMBE) last July 10, 2006; and the said certificate had a term of two (2) years or until July 9, 2008. Accordingly, D'RBG Marine Ex-Import, Inc. has renewed its BMBE Certificate of Authority last August 13, 2008, which is effective for two (2) years or until August 12, 2010. In reply, please be informed that Sections 3 (a) and 7 of R.A. 9178 provides, 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. aTEHIC 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 D'RBG Marine Ex-Import, Inc. is a registered BMBE and was awarded BMBE Certificate of Authority by the Office of the City Treasurer, Mandaue City, it is therefore exempt from the payment of income tax for income arising from the operations of the enterprise for the periods of July 10, 2006 to July 9, 2008 and August 13, 2008 to August 12, 2010, as provided for in the certificates of authority. (BIR Ruling No. 356-2004 dated June 25, 2004) 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