BIR Ruling No. 248-11

July 26, 2011 BIR RULING NO. 248-11 R.A. 9178; BIR Ruling No. DA-356-04; BIR Ruling No. DA-(OSL-029) 434-09; BIR Ruling No. DA-(OSL-031) 514-09 Summer Shine Food Enterprises 199-20 Villa Carolina Townhouse III Roxas Blvd., Tambo, Paraaque City Attention: Mr. Joseph P. Raz Sales and Operation Manager Gentlemen : This refers to your letter dated November 09, 2010 requesting for exemption from the payment of income tax pursuant to the provisions of Republic Act (RA) 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", SUMMER SHINE FOOD ENTERPRISES, was awarded the Certificate of Authority for Barangay Micro-Business Enterprise (BMBE) last September 16, 2010; and that this will have a term of two (2) years or until September 16, 2012. 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: (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. SEACTH 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 SUMMER SHINE FOOD ENTERPRISES 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 September 16, 2010 or until September 16, 2012. (BIR Ruling No. 356-2004 dated June 25, 2004, BIR Ruling No. DA-(OSL-029) 434-09 dated August 3, 2009, BIR Ruling No. DA-(OSL-031) 514-09 dated September 9, 2009) 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. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue