BIR Ruling No. 476-11

December 5, 2011 BIR RULING NO. 476-11 Sections 3 (a) and 7 of R.A. 9178; BIR Ruling No. 249-2011 dated July 26, 2011 Maxi Clean Laundry Service Naga Road Corner St. Joseph Avenue Pulang Lupa II, Las Pias City Attention: Mr. Maximiano M. Calao Gentlemen : This is to acknowledge receipt of your letter dated August 4, 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 Maxi Clean Laundry Service, with principal place of business at Naga Road corner St. Joseph Avenue, Pulang Lupa II, Las Pias City and TIN 173-995-361-000 was granted a BMBE Certificate of Authority (No. 00000088) on June 7, 2011 by the local government of Las Pias City pursuant to Republic Act No. 9178; that the BMBE Certificate of Authority will expire on June 7, 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. TAIDHa 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 MAXI CLEAN LAUNDRY SERVICE is a registered BMBE and was awarded BMBE Certificate of Authority by the Office of the City Treasurer of Las Pias 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 7 June 2011 until 7 June 2013. (BIR Ruling No. 249-2011 dated July 26, 2011) 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