Aqua Central Distribution, Incorporated

March 12, 2009 BIR RULING [DA-(OSL-011) 152-09] R.A. No. 9178; BIR Ruling No. DA-129-2005 Aqua Central Distribution, Incorporated 43-A Salvador Street Labangon, Cebu City Attention: Ms. Irene S. Barian Finance and Administration Officer Gentlemen : This refers to your letter dated April 2, 2007 requesting exemption from the payment of income tax pursuant to the provisions of Republic Act (R.A.) No. 9178. Documents show that Aqua Central Distribution, Incorporated is registered with the Bureau of Internal Revenue, Revenue District Office No. 82, Cebu City under Certificate of Registration No. 2RC0000041525 dated January 12, 2004. Aqua Central Distribution, Incorporated was issued a Certificate of Authority for Barangay Micro Business Enterprise under Certificate of Registration No. 05-15-06-2007 dated May 15, 2006 pursuant to Republic Act 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," entitling it to all benefits and incentives subject to the terms and conditions set forth in the said law, which will expire on May 15, 2008. In reply, please be informed that Sections 3 (a) and 7 of R.A. No. 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 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 Republic Act No. 6977, as amended by Republic Act No. 8289. ECAaTS 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 reduce the amount of local taxes, fees and charges imposed or to exempt the BMBEs from local taxes, fees and charges." Inasmuch as Aqua Central Distribution, Incorporated is a registered BMBE and was awarded BMBE Certificate of Authority by the City of Cebu, 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 May 15, 2006 or until May 15, 2008 (BIR Ruling No. DA-129-2005 dated April 6, 2005). 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 as null and void. IaAEHD Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service