Special Individual

Taxpayers
Individuals registered as Barangay
Micro Business Enterprise (BMBE)
• More than two years after the passage of the Act, the Department of
Finance (DOF) issued Department Order (DO) 17-2004 – the
Guidelines to implement the registration of Barangay Micro Business
Enterprises and the Availment of Tax Incentives under Republic Act
9178 or The Barangay Micro Business Enterprises (BMBEs) Act of
2002. DO 17-2004 took effect on May 14, 2004; the BIR circularized
the same through RMC 40-2004 dated May 26, 2004.
Individuals registered as
Barangay Micro Business
Enterprise (BMBE)
• A BMBE refers to any business entity or enterprise engaged in the
production, processing, or manufacturing of products or
commodities, including agro-processing, trading and service, which
activities are barangay-based and micro-business in nature, and
whose total assets including those arising from loans but exclusive of
land on which the particular business office, plant and equipment are
situated, shall not be more than Three Million Pesos.
Individuals registered as
Barangay Micro Business
Enterprise (BMBE)
• Registration
• The Office of the Treasurer of each city or municipality shall register
the BMBEs and issue a Certificate of Authority (CA) to enable the
BMBE to avail of the benefits under R.A. No. 9178. Provided, that only
by the Office of the Treasure of the city or municipality that has
jurisdiction over the principal place of business of the BMBE.
• The LGUs shall issue the CA promptly and free of charge. However, to
defray the administrative costs of registering and monitoring the
BMBEs, the LGU may charge a fee not exceeding One Thousand Pesos.
Individuals registered as
Barangay Micro Business
Enterprise (BMBE)
Registered BMBEs can avail the following incentives
1. Income tax exemption from income arising from the operation of the
enterprise;
• A duly registered BMBE shall be exempt from income tax on income
arising purely from its operations as such BMBE.
2. Exemption from the coverage of the Minimum Wage Law, BMBE
employees will still received the same social security and health care
benefits as other employees.
Individuals registered as
Barangay Micro Business
Enterprise (BMBE)
3. Priority to a special credit window set up specifically for the financing
requirements of the BMBEs; and
4. Technology transfer, production and management training, and
marketing assistance programs for BMBE beneficiaries.
BOI-Registered Filipinos
Availing of ITH
• All registered individual shall be granted the Income Tax Holiday (ITH)
incentive to the extent they are engaged in a preferred area of
investment as declared by the Board of Investments (BOI) under EO
No. 226 (Omnibus Investments Code).
• To qualify for BOI registration, an individual must be engaged or is
proposing to engage:
1. In an are of activity listed in the Investment Priorities Plan (IPP);
2. If not so listed, at least fifty percent of its production is for export if a
Philippine national, or at least seventy percent of its production is for
export if a foreigner;
BOI-Registered Filipinos
Availing of ITH
3. Exporting part of its production under such terms and conditions
and/or limited incentives as the BOI may determine;
4. Producing or manufacturing product which is used as input to an
export product;
5. Export trading of export products bought by it form one or more
export producers;
6. Rendering service to domestic and foreign tourist if listed in the IPP;
BOI-Registered Filipinos
Availing of ITH
7. In rendering technical, professional or other services as may be
determined by the BOI which are paid for in foreign currency; or
8. In exporting television and motion pictures and musical recordings
made or produced in the Philippines, either directly or through an
export trader
BOI-Registered Filipinos
Availing of ITH
• ITH – exemption from income taxes levied by the National Government
Registered individuals may avail of the ITH to the extent they are engaged in
a preferred area of investment (either pioneer or non-pioneer)
• Period of availment shall be as follows:
• New registered pioneer firms – for 6 years from commercial operations.
• New registered non-pioneer firms – for 4 years from commercial operations.
• Expanding firms – for 3 years from commercial operations of the expansion.
PEZA-Registered enterprises in
ECOZONES
1. Income tax holidays (ITH) – Individuals registered as ECOZONE (a) Export
Enterprises or (b) Free Trade Enterprises may choose to avail of this incentive
under EO No. 226.
Note: PEZA-registered entities enjoying ITH also enjoy the following incentives:
• Exemption from duties and taxes on importation into ECOZONE (Rule XV, Sec 1,
IRR of RA 7916)
• Exemption from payment of the RPT on machineries and equipment they
acquire or use in their production operations, during the first three years of use
of such machinery and equipment (Art 78, EO 226); and
• Exemption from payment of local taxes, licenses
PEZA-Registered enterprises in
ECOZONES
2. Five (5%) Final Tax on Gross Income (“5% GIT) – 5% of the gross
income earned by the business enterprise within the ECOZONE shall be
paid and remitted as follows:
• Three percent (3%) to the National Government;
• Two percent (2%) which shall be directly remitted by the business
establishments to the treasurer’s office of the municipality or city
where the enterprise is located (Section 24, R.A. No 7916).
PEZA-Registered enterprises in
ECOZONES
The 5% GIT shall be in lieu of all other taxes (national or local) except for real
property taxes on land owned by an ECOZONE developer/operator.
The 5% GIT shall be available to
• Individuals registered as ECOZONE (1) Export Enterprises or (2) Free Trade
Enterprises upon expiry of the ITH if such individuals chose to avail of the ITH
at the start of its operations; and
• Other individuals registered as ECOZONE (1) Developers/Operators, (2)
Export Enterprises, (3) Free Trade Enterprises, (3) Free Trade Enterprises, (4)
Domestic Market Enterprises, (5) Utilities Enterprises, (6) Facilities
Enterprises, or (7) Tourism Enterprises.
PEZA-Registered enterprises in
ECOZONES
Notes:
The exemption from all other taxes under the ITH and 5% GIT regimes does not
include the following:
• Withholding taxes at source (expanded withholding tax (“EWT”) and Final
Withholding Tax (“FWT”)) on income payments by PEZA-registered individuals;
• Withholding tax on compensation income of employees of PEZA-registered
individuals; and
• Fringe Benefits Tax (“FBT”) on fringe benefits given to managerial or
supervisory employees of PEZA-registered individuals.