Atty. Maria Lourdes R. Reyes

September 9, 2009 BIR RULING [DA-(OSL-031) 514-09] Atty. Maria Lourdes R. Reyes 131 F. Manalo Street San Juan City Madam : This refers to your letter dated August 24, 2009 requesting on behalf of your client, Empresa Consultativa en Negocio De Comida , for exemption from the payment of income tax pursuant to the provisions of Republic Act (RA) No. 9178. It is represented that Empresa Consultativa en Negocio De Comida is a duly registered sole proprietorship business engaged in consultancy services in the food business; that it is registered with the Barangay Micro Business Enterprise (BMBE) in the City of Paraaque with BMBE Registration No. 2009-00162 and has been issued a BMBE Certificate of Authority effective two (2) years from August 3, 2009 until August 4, 2011; and that pursuant to RA 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 entitled to all benefits and incentives subject to the terms and conditions set forth in the said law. In reply, please be informed that Sections 3 (a) and 7 of R.A. 9178 provide, viz. : "SEC. 3. Definition of Terms . As used in the Act, the following terms shall mean: aITDAE (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. HaAISC 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 Empresa Consultativa en Negocio De Comida is a registered BMBE and was awarded BMBE Certificate of Authority by the City of Paraaque, 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 August 3, 2009 or until August 4, 2011. 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 null and void. SCEHaD Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service