Primark Tooling Industries

March 12, 2009 BIR RULING [DA-(OSL-013) 154-09] R.A. 9178; DA-356-04 Primark Tooling Industries Rm. 212 AD Center Square Building Amang Rodriguez cor. Evangelista St. Santolan, Pasig City Attention: Mr. Christopher Arzadon Owner/General Manager Gentlemen : This refers to your letter dated March 11, 2008 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," Primark Tooling Industries was awarded the Certificate of Authority for BMBE last January 30, 2008; that this will have a term of two (2) years or until January 30, 2010; and that Primark Tooling Industries is registered with the BIR with Taxpayer Identification No. 201-361-944-000. 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. CSHEca 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 Primark Tooling Industries is a registered BMBE and was awarded BMBE Certificate of Authority by the City of Pasig, 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 January 30, 2008 or until January 30, 2010. Consequently, during the covered period, the income received by Primark Tooling Industries from its customers is exempt from the withholding tax imposed under Revenue Regulations No. 2-98, as amended. 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