Rosemarie's Delicatessen

March 5, 2009 BIR RULING [DA-(OSL-008) 138-09] R.A. 9178; DA-471-2007 Rosemarie's Delicatessen 41 14th St., New Manila Quezon City Attention: Ms. Rosemarie S. Aguila Proprietress Gentlemen : This refers to your letter dated September 22, 2008 requesting for exemption from the payment of income tax pursuant to the provisions of Republic Act (R.A.) No. 9178. LLjur It appears that Rosemarie's Delicatessen with Tax Identification No. (TIN) 237-528-689-000 was awarded by the Office of the Treasurer, Quezon City a Certificate of Authority for Barangay Micro Business Enterprises (BMBE) last August 4, 2008 pursuant to R.A. 9178, "An Act to Promote the Establishment of BMBE, Providing Incentives and Benefits Therefor, and for Other Purposes", entitling it to all the benefits and incentives subject to the terms and conditions set forth in the said law which will expire on August 4, 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. 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 Rosemarie's Delicatessen is a registered BMBE and was awarded BMBE Certificate of Authority by the Office of the City Treasurer, Quezon City, it is therefore exempt from the payment of income tax and consequently from the 1% withholding tax for income arising from the operation of the enterprise for a period of two (2) years from August 4, 2008 or until August 4, 2010. (BIR Ruling No. 471-2007 dated August 24, 2007) 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 as null and void. HCEaDI Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service