BIR Ruling No. 385-12

June 6, 2012 BIR RULING NO. 385-12 Sections 3 (a) and 7 of R.A. 9178; BIR Ruling No. 356-2004 dated June 25, 2004 Vismin IMSC Services, Inc. #28, 2nd Floor, Cocolife Building, Palma Gil Street, Davao City Attention: Socrates O. Mancera President Gentlemen : This is with regard to your letter dated 29 April 2011, requesting for exemption from income tax and other benefits enjoyed by Barangay Micro Business Enterprise (BMBE) under Department Order No. 17-2004. It is represented that VISMIN IMSC SERVICES, INC., with principal place of business at #28 2nd Floor, Cocolife Building, Palma Gil Street, Davao City, was granted a BMBE Certificate of Authority (No. 0411) by the local government of Davao City pursuant to Republic Act No. 9178; and that the BMBE Certificate of Authority will expire on March 17, 2013. 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. 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 VISMIN IMSC SERVICES, INC. is a registered Barangay Micro Business Enterprise (BMBE) and was awarded a BMBE Certificate of Authority by the Office of the City Treasurer of Davao City, 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 17 March 2011 until 17 March 2013 . (BIR Ruling No. 356-2004 dated June 25, 2004) 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, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue