BIR Ruling No. 361-11

October 4, 2011 BIR RULING NO. 361-11 Republic Act No. 9178; BIR Ruling No. DA 442-06; BIR Ruling No. [DA-(OSL-003) 027-10]; BIR Ruling No. [DA-(OSL-019) 569-08] Maid Provider Madam's Katulong Express Employment Services Unit 904 Somerset Mansion 1809 Leveriza Street 1300 Pasay City Attention: Jeryll Harold P. Respicio Gentlemen : This refers to the letter dated September 14, 2010 relative to your request for exemption from the payment of income tax pursuant to the provisions of Republic Act (R.A.) 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 Enterprise, Providing Incentives and Benefits Therefor, and for Other Purposes," you were awarded the Certificate of Authority for Barangay Micro Business Enterprise last September 1, 2010 entitling you to all benefits and incentives subject to the terms and conditions set forth in the said law, which will expire on September 1, 2012. In reply thereto, please be informed that Sections 3 (a), 4 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 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. IDETCA xxx xxx xxx "SEC. 4. Registration and Fees. The Office of the Treasurer of each city or municipality shall register the BMBEs and issue a Certificate of Authority to enable the BMBE to avail of the benefits under this Act. Any such application shall be processed within fifteen (15) working days upon submission of complete documents. Otherwise, the BMBEs shall be deemed register. The Municipality or City Mayor may appoint a BMBE Registration Officer who shall be under the Office of the Treasurer. Local government units (LGUs) are encouraged to establish One-Stop-Business Registration Center to handle the efficient registration and processing of permits/licenses of BMBEs. Likewise, LGUS shall make a periodic evaluation of the BMBEs financial status for monitoring and reporting purposes. The LGUs shall issue the Certificate of Authority promptly and free of charge. However, to defray the administrative costs of registering and monitoring the BMBEs, the LGUs may charge a fee not exceeding One Thousand Pesos (P1,000.00). The Certificate of Authority shall be effective for a period of two (2) years, renewable for a period of two (2) years for every renewal. As much as possible, BMBEs shall be subject to minimal bureaucratic requirements and reasonable fees and charges. 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 Madam's Katulong Express Employment Services with TIN 263-737-890-000 is a registered BMBE and was awarded BMBE Certificate of Authority by the City of Pasay, 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 1, 2010 or until September 1, 2012. It is required, however, for you to register with the Revenue District Office having jurisdiction over you. (BIR Ruling No. DA-442-2006 dated July 19, 2006) 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. aECSHI Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue