QUESTION: CAN WE RUN A BUSINESS WITHOUT PAYING INCOME TAX, LEGALLY?
ANSWER: YES
QUESTION: HOW?
ANSWER: REGISTER AS A BARANGAY MICRO BUSINESS ENTERPRISE (BMBE)
REPUBLIC
ACT 9178, BARANGAY MICRO BUSINESS ENTERPRISES ( BMBE’S) ACT OF 2002
WHAT IS
THIS LAW ABOUT?
The
BMBE’s Act of 2002 encourages the formation and growth of Barangay Micro
Business Enterprises by granting them incentives and benefits.
WHAT
ARE THE BENEFITS AND INCENTIVES OF REGISTERED BMBE’S?
1. Income
tax exemption from income arising from the operations of the enterprise.
2. Exemption
from coverage of the Minimum Wage Law BUT BMBE employees will still receive the
same social security and health care benefits like other employees.
3. Priority
to a special credit window set up specifically for financing requirements of
BMBE’s
4. Technological
transfer, production and management training, and marketing assistance programs
for BMBE’s beneficiaries.
WHAT IS BARANGAY MICRO BUSINESS ENTERPRISE (BMBE)?
Under
Republic Act No. 9178 or the BMBE’s Act of 2002, a BMBE is referred to as 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 excluding land, shall not be more than P 3
million. Such assets shall include those arising from loans but not the land on
which the plant and equipment are located.
SO, what exactly is a MICRO BUSINESS?
A
micro business or enterprise is defined as any business activity or enterprise
engaged in industry, agribusiness and or services, whether single
proprietorship, cooperative, partnership or corporation whose total assets,
inclusive of those arising from loans but exclusive of land on which the particular
business entity’s office, plant and equipment are situated, must have value not
more than three (3) million pesos. ( Sec. 3 of R.A. 9501 otherwise known as the
Magna Carta for Micro, Small, Medium Enterprises. (MSMEs)
Total Asset (exclusive of
land) = 2.5 M
Land(where office, plant & equipment are situated ) = 4M
_______________________________
MICRO BUSINESS
Total Asset (exclusive of land)
= 4M
Land (where office, plant & equipment are situated ) = 1M
_______________________________
NOT MICRO BUSINESS
If
your business or enterprise falls under micro business category, you MAY BE eligible to be registered as a Barangay
Micro Business Enterprise (BMBE) and enjoy the benefit and incentives of the “
Barangay Micro Business Enterprise Act of 2002 also known as R.A. 9178.
WHERE TO
REGISTER AS A BMBE?
BARANGAY
MICRO BUSINESS ENTERPRISE (BMBE’S) CAN
NOW REGISTER THEIR BUSINESSES, FREE OF CHARGE , AT THE DEPARTMENT OF TRADE AND
INDUSTRY (DTI) THROUGH THE AGENCY’S NEGOSYO CENTERS.
GREAT!!! NEXT QUESTION!!
HOW
DOES ONE REGISTER AS A BMBE?
Based
on the revised guidelines issued by DTI, any person, natural or juridical, such
as partnership, corporation, association and cooperation, having the
qualification and none of the disqualifications shall be eligible to register
as BMBEs.
A person applying to
be registered as a BMBE shall meet the following qualifications:
1. With an
asset f not more than three million pesos ( P 3,000,000.00) excluding land
2. Engaged
in the production , processing or manufacturing of products or commodities,
including agro – processing , trading and services.
3. Registered
with the Department of Trade and Industry for Sole proprietorships, for
juridical persons: with the Securities and Exchange Commission (SEC) for corporation, partnerships and
associations; and with the Cooperative Development Authority for cooperatives.
Applications for BMBE Certificate of Authority shall be
filed with the Negosyo Centers established in each province, city or
municipality, or in the DTI offices where Negosyo Centers have not been set up.
The following shall be submitted in support of the duly
filled up BMBE application form:
A. Certificate
of Business Name Registration from the Department of Trade and Industry (DTI)
or
B. Certificate
of Registration from the Securities and Exchange Commission (SEC) or
C.
Certificate of Registration from the Cooperative
Development Authority (CDA).
WHAT IS THE PROCEDURE FOR REGISTRATION?
The applicant shall follow the steps herein enumerated in
applying for BMBE Certificate of Authority (CA):
1. Accomplish
and file the application form for BMBE Certificate of Authority;
2. The DTI
, through the Negosyo Center, evaluates the application for purposes of
determining the eligibility and qualification as a BMBE;
3.
The DTI after finding the applicant to be
eligible and qualified, issues the BMBE Certificate of Authority within
fifteen (15) working days from
receipt of application with complete
requirements; otherwise, the BMBE
CERTIFICATE OF AUTHORITY shall be deemed approved ( where in such a cases it
becomes ministerial on the part of DTI to issue the BMBE Certificate of
Authority).
WHAT IS THE VALIDITY PERIOD OF THE BMBE CERTIFICATE OF
AUTHORITY REGISTRATION?
The BMBE Certificate
Authority shall be effective for a period of two (2) years commencing
from the date of issuance. The CA may be renewed for the same period of two
years (2) and every two years thereafter
subject to the applicant’s continued compliance with the eligibility
requirements prescribed by law and DTI DAO No. 16-01 Series of 2016.
HOW MUCH WILL IT COST TO REGISTER?
The registration and issuance of the CA shall be FREE OF
CHARGE
HOW CAN A BMBE AVAIL OF THE EXEMPTION FROM COVERAGE OF
THE MINIMUM WAGE LAW?
Once a BMBE is registered and issued with a Certificate of
Authority, it is automatically EXEMPTED from the minimum wage law.
FINALLY!!
WHAT ARE THE STEPS IN AVAILING OF THE INCOME TAX EXEMPTION?
The BMBE registers
with the BIR Revenue District Office ( RDO) where the principal office or place
of business is located and it’s submission of the necessary documents.
The ff are the documents to be submitted to BIR to avail of
Income Tax Exemption:
1. Copy of the BMBE’s Certificate
of Authority
2. Sworn Statement of Assets of the
BMBE and/or its affiliates, supported by pertinent documents
3. Certified list of branches,
sales outlets, places of production, warehouses and storage facilities
4. Certified list of affiliates
5. Latest audited Financial
Statement or Account Information Form .
WHAT DOCUMENT SHOULD BE FILED WITH BIR BY AN INCOME TAX
EXEMPT BMBE?
Instead of an income tax return, an income tax exempt
BMBE is required to submit an Annual Information Return. This is filed on or
before the 15th day of the 4th month after the close of the
taxable year with an Account Information Form, which contains
data from its financial statement and Sworn Statement of Assets Owned and/or
Used.
CAN MY INCOME TAX EXEMPTION BE REVOKED?
YES!
YOUR INCOME TAX EXEMPTION CAN BE REVOKED FOR ANY OF THE FF REASONS:
1.
Transfer of place of business
2.
Value of its total assets exceeds
P3M
3.
Voluntary surrender of the
Certificate of Authority
4.
Death of the registered individual
owner of the BMBE; violation or noncompliance with the provisions of R.A. 9178
5.
Merger or consolidation with an
entity which is not eligible to be a BMBE
6.
Sale or transfer of the BMBE, if it
is a sole proprietorship without prejudice to the transferee applying for
registration
7.
Submission of fake or falsified
documents;
8.
Retirement from business, or
cessation/suspension of operations for one year; and
9.
Making false or omitting required
declarations or statements
There you go, STEPS ON HOW TO REGISTER AS A BMBE for you to be exempted from income tax. Good luck in
your business. We would like to hear
from you. Please email us your experience in applying for your Certificate of Authority.
Send it to ione.mejia@gmail.com. Thank you.
