How can a BMBE avail of the exemption from the coverage of the minimum wage law?
Once a BMBE is registered and issued with a Certificate of Authority by the Municipal or City Treasurer, it is automatically exempted from the minimum wage law.
What is the effect of the law on wages of existing/newly hired employees?
Existing employees shall continue to receive their wages, allowances, and other benefits. On the other hand, wages of employees hired by BMBEs after the latter’s registration shall be exempted from the coverage of the minimum wage law. BMBE workers shall continue to be covered by applicable labor laws and regulations, including the non-diminution rule on existing wages and benefits.
Is the exemption from the coverage of the minimum wage law prospective in nature?
Yes. The rule is that laws shall have prospective application only. Thus, an enterprise’s exemption from the coverage of the minimum wage law can only be applied to employees hired after its registration as a BMBE.
How much should a BMBE worker be paid for his services?
It depends between the employer and the worker. They shall mutually agree on the acceptable wage rate.
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 its submission of the necessary documents.
What are the documents to be submitted to the BIR to avail of Income Tax Exemption?
- Copy of the BMBE’s Certificate of Authority
- Sworn Statement of Assets of the BMBE and/or its affiliates, supported by pertinent documents
- Certified list of branches, sales outlets, places of production, warehouses and storage facilities
- Certified list of affiliates
- Latest audited Financial Statement or Account Information Form or its equivalent
What document should be filed with BIR by an income tax exempt BMBE?
In lieu 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 15thday 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.
Is the Income Tax Exemption privilege of a BMBE irrevocable?
No. The income tax exemption privilege of a BMBE may be revoked for any of the following reasons:
- Transfer of place of business;
- Value of its total assets exceeds P3M;
- Voluntary surrender of the Certificate of Authority;
- Death of the registered individual owner of the BMBE; violation or non-compliance with the provisions of R.A. 9178;
- Merger or consolidation with an entity which is not eligible to be a BMBE;
- Sale or transfer of the BMBE, if it is a sole proprietorship without prejudice to the transferee applying for registration;
- Submission of fake or falsified documents;
- Retirement from business, or cessation/suspension of operations for one year; and
- Making false or omitting required declarations or statements
DTI’s Bureau of Micro-, Small-, and Medium-Scale Enterprises Development
751-0384 / 890-4968 / 897-7596 / 897-1693